Author: tfwee
Suntec – Phillip
Suntec REIT reported gross revenue for 2QFY09 of $64.5 million (+8.9% y-o-y, flat q-o-q)), net property income was $48.7 million(+6.2% y-o-y, flat q-o-q). Distributable income was $47.7 million(+13.5% y-o-y, +2.9% q-o-q). DPU for the quarter was 2.977 cents (+6.3% y-o-y, +2.0% q-o-q).
Office portfolio reversionary rent continues to show a downward trend. It has fallen 38.9% from a year ago at $13.50 to 8.24. Occupancy of the office portfolio has also been sliding down from 1Q08 at 99.8% to 94.8% in 2Q09. These reflect the office sector is still reeling from the effects of recession. The retail portfolio is more resilient with occupancy maintaining above 98%. The office portfolio accounts for 47% of total revenue while the retail portfolio contributes 53%.
As previously announced, Suntec has no near term refinancing concern. It has successfully secure $825 million of term loan in April 2009. The next loan maturity is in 2011 with loan amount of $532.5 million. The current gearing is 34%.
Valuation & recommendation. We believe that demand for office space will take time to pick up following the nation’s exit from recession in the last quarter. We make no changes to our assumptions and have a FY09F DPU forecast of 10.05 cents which translates to a dividend yield of 9.5%. Fair value remains unchanged at $0.94 and retain our Hold recommendation
StarHill Gbl – BT
Starhill Global DPU rises 6.7% in Q2
STARHILL Global Reit has announced a distributable income of $18.4 million for the second quarter of 2009 with a distribution per unit (DPU) of 1.90 cents, 6.7 per cent higher than for the previous corresponding period.
The latest distribution represents a yield of 12 per cent on an annualised basis, said YTL Pacific Star, the manager of the Reit, which has a large presence in Orchard Road.
About $0.4 million of income available for distribution for the second quarter, comprising mainly overseas income, has been retained to satisfy certain legal reserve requirements in China and for prudency, it added.
Gross revenue in Q2 2009 was $33.4 million, or 10.5 per cent higher than the $30.2 million in Q2 2008, due primarily to higher rates achieved for office renewals and new leases in Singapore, rent review of the master lease in Ngee Ann City, as well as higher revenue from its Chengdu property.
Net property income was higher at $27 million, an increase of 16.4 per cent, mainly attributed to higher gross revenue.
Said Francis Yeoh, executive chairman of YTL Pacific Star: ‘Starhill Global Reit’s strong performance, despite difficult market conditions during the quarter, has been underpinned by its quality portfolio and the manager’s robust capital and asset management strategies.’
‘Our focus continues to be creating more value for our unitholders by driving asset performance and building long-term growth prospects for Starhill Global Reit.’
Occupancy for retail space in both Wisma Atria and Ngee Ann City remains high at around 98 per cent, while occupancy for office space in the two Singapore properties is still healthy at above 90 per cent, the Reit said.
It added it will continue to concentrate on tenant retention and sustaining the appeal of its retail properties in terms of trade mix and offerings.
a-iTrust – CNA
Ascendas India Trust to pay 2.05 S’pore cents per unit for Q1
SINGAPORE: Singapore-listed Ascendas India Trust said it will pay 2.05 cents per unit for its fiscal first quarter. This was up 25 per cent over the same period a year ago.
All in, its first quarter distributable income to unit holders came to S$15.7 million. The rise was on the back of a 15 per cent increase in net property income to S$18.3 million for the three months ended June.
The manager of the trust said a key contributor to the results was the growth in property income despite the difficult business environment.
It added that income grew on the back of high occupancy rates and resilient rental rates.
Looking ahead, the property trust said it will continue to focus on retaining tenants, containing costs and seeking opportunities to invest in future growth.
However, it said its performance is tied to the performance of its tenants and demand for office space in Bangalore, Chennai and Hyderabad.
Cambridge – CIMB
Above expectations
• DPU above expectation. 2Q09 results are in line with consensus forecast but 6% above our expectation mainly due to amortised loan transaction costs that were added back into distributable income. Distribution of S$10.7m (-13.8% yoy) and DPU of 1.35cts (-13.8% yoy) form 31% of our FY09 forecasts. 1H09 DPU of 2.64cts represents 60% of our full-year forecast. The yoy decrease in distribution can be traced to higher management fees paid in cash and higher borrowing costs. Net property income of S$16m was flat (-0.3% qoq), while portfolio occupancy was stable at 99.5% (+0.3% pt qoq) as at Jun 09.
• Assets devalued by 9%. In 2Q09, the manager commissioned a full valuation of CREIT’s assets, with a 9% fall in asset value to S$880.3m. This was mainly due to higher cap rates and lower rents used by the valuers. After the valuation, asset leverage rose to 43.8% from 39.9%, while NAV/unit decreased to S$0.62 from S$0.73cts. Management anticipates flat valuation by the end of the year.
• Private placement of S$28m diluted DPU by 8%. On 27 Jul, management announced a private placement of 71.1m units to raise gross proceeds of S$28m. This represented 9% of the units in issue as at 31 Dec 08. Assuming no other changes, DPU would be diluted by 8%. About 23% of the privately placed units will go to its sponsors NAB (19%) and Oxley (4%). Units issued to NAB and Oxley will be priced at S$ 0.399/unit, based on the adjusted volume-weighted average price (VWAP) of units for the full market day on 24 Jul 09. Units issued to other investors will be priced at S$0.392, a 5% discount to VWAP.
• Changes to our estimates. We reduce our rental decline assumptions for CREIT in FY09 to -2% (from -5%), in view of the stable performance in 1H09. Additionally, we adjust the number of units to factor in the private placement, and add back the amortised loan transaction cost to distributable income. The net result for our FY09- 11 DPU forecasts is an upgrade of 12-18%.
• Maintain Outperform; higher target price of S$0.52 (from S$0.48). Our target price rises in tandem with our increased DPU forecasts to S$0.52 (from S$0.48), still based on DDM-valuation (discount rate 9.4%). We maintain our Outperform rating given its share-price upside potential and forward yields of 12%.
StarHill Gbl – CNA
Starhill Global REIT’s Q2 distribution per unit up 6.7% on-year
Singapore-listed Starhill Global Reit, which owns stakes in Wisma Atria and Ngee Ann City, said Wednesday its distribution per unit for the second quarter rose 6.7 per cent year-on-year to 1.9 Singapore cents.
Net property income for the three months to June climbed 16.4 per cent to S$27 million, mainly due to higher rates achieved for office renewals and new leases in Singapore, as well as higher revenue from its Chengdu property in China.
The property trust said occupancy for retail space in both Wisma Atria and Ngee Ann City remained high at around 98 per cent in the quarter.
Occupancy for office space in the two properties meanwhile were above 90 per cent.
Starhill said it will continue to concentrate on tenant retention and sustaining the appeal of its retail properties in terms of trade mix and offerings.
It added that managing financing cost remain a key objective.