MacarthurCook Reit portfolio value up $30.6m on revaluation

MACARTHURCOOK Industrial Reit (MI-Reit) said independent revaluations of six of its properties have resulted in the total value of its initial portfolio of 12 properties standing now at $346.8 million, a rise of $30.6 million or 9.7 per cent.

MacarthurCook Investment Managers (Asia), the manager of MI-Reit, has a policy of revaluing properties in the portfolio on a rolling basis throughout the financial year and in accordance with the property fund guidelines.

The initial portfolio of the real estate investment trust, which was listed on April 19 this year, comprises 12 industrial assets across Singapore with a combined value of $316.2 million at the date of listing.

The largest rise in valuation came from UE Technology Park – MI-Reit’s largest property by value – which saw a revaluation gain of $23.9 million, or 21 per cent. The revaluations of all the six properties were conducted by CB Richard Ellis.

Just last month, Singapore’s fourth listed industrial Reit said it was extending its investments into offices and technology parks by agreeing to buy Plot 4A, International Business Park from Eurochem Corporation (a member of Tolaram Group), for $91 million.

MI-Reit invests primarily in industrial real estate assets in Singapore, Japan, Hong Kong, Malaysia and China.

Last month, the Reit reported a distributable income of $3.9 million for its first quarter ended June 30. Distribution per unit (DPU) was 1.52 cents, which, was 3 per cent higher than the forecast DPU of 1.47 cents.

MACARTHURCOOK INDUSTRIAL REIT’s PORTFOLIO VALUE INCREASES BY S$30.6 MILLION FOLLOWING ANNUAL REVALUATIONS

MacarthurCook Investment Managers (Asia) Limited (“MCKIM Asia”), the Manager of SGXST
listed MacarthurCook Industrial REIT (“MI-REIT”), is pleased to announce today that
independent annual revaluations1 for six of MI-REIT’s properties (the ”Properties”) have been completed.

The revaluations have resulted in an increase of S$30.6 million to MI-REIT’s book value, representing a 9.7% gain over the appraised value² of the Properties as at the Listing Date of 19 April 2007. The revaluations, which have been completed in accordance with the relevant accounting standard, Financial Reporting Standard 40 Investment Property, and the Property Fund Guidelines, have raised MI-REIT’s total portfolio value to S$346,800,000.

The largest rise in valuation came from MI-REIT’s largest property by value, UE Technology Park, which saw a revaluation gain of S$23.9 million, or 21.0%.

² Appraised value of total portfolio is S$316.2 million, as at Listing Date on 19 April 2007. Valuations were issued on 15 November 2006.

Source : SGX

MI-Reit to buy warehouse for $18.3m

MACARTHURCOOK Industrial Reit (MI-Reit) has signed a conditional put and call option agreement to acquire a four-storey office and warehouse facility at 7 Clementi Loop for $18.3 million.

The vendor of the facility, Nova Engineering and Logistics, will lease back the property for five years, with the option to extend the lease for another five years. The lease will start after refurbishment to the building is completed by Nov 30, which is when MI-Reit’s acquisition of the property is expected to be completed.

Based on this scheduled completion date, the pro forma financial effect on MI-Reit’s distribution per unit (DPU) for the financial year ended March 31, 2008 is an additional 0.20 cents per unit on an annualised basis. This represents an increase of 2.7 per cent from the forecasted FY2008 DPU of 7.41 per cent per unit.

For FY2009, the pro forma effect of the acquisition is an additional 0.23 cents a unit, representing an increase of 3 per cent over the forecasted DPU of 7.59 cents a unit.

Chris Calvert, CEO of the Reit manager MacarthurCook Investment Managers (Asia), said that apart from the yield accretion derived from the deal, the property will provide greater geographic diversification to the Reit’s portfolio and provide exposure to the growing logistics and warehousing property sub-sector here.

‘MI-Reit will benefit from firm rentals and capital values in this sub-sector as a result of the strong demand for high quality and strategically located warehousing and logistics property, arising from the growing outsourcing trend in high value-added industries,’ said Mr Calvert.

The acquisition will reduce MI-Reit’s exposure to UE Tech Park, the Reit’s largest property by value, from 36.1 per cent to 34.1 per cent of total portfolio value. In terms of income source, exposure to UE Tech Park is reduced from 33.2 per cent to 31.3 per cent.

The purchase of 7 Clementi Loop is also the first of a series of acquisitions worth a total of $500 million that MI-Reit intends to complete by March 31, 2008.

MACARTHURCOOK INDUSTRIAL REIT ACQUIRES LOGISTICS PROPERTY FOR S$18.3 MILLION

– Yield-accretive acquisition
– Increases DPU by 2.7% to 7.61 cents per unit for FY 08 and 3.0% to 7.82 cents per unit for FY 09

Singapore, 30 August 2007 – MacarthurCook Investment Managers (Asia) Limited (“MCKIM Asia”), the Manager of SGX-ST Listed MacarthurCook Industrial REIT ( “MIREIT”), is pleased to announce that through HSBC Institutional Trust Services (Singapore) Limited (the Trustee”), MI-REIT has signed a conditional put and call option agreement (the “Agreement” ) to acquire the property at 7 Clementi Loop, Singapore, for a total consideration of S$18.3 million.

The vendor of 7 Clementi Loop, Nova Engineering and Logistics Pte Ltd (“NEL”), will lease back the property for five years, with the option to extend for another five years. The lease will commence following the completion of certain refurbishment works to the property, which are expected to be completed by 30 November 2007.

Based on the scheduled completion date, the acquisition is accretive to MI-REIT’s distribution per unit (“DPU”). The pro forma financial effect of the acquisition on the DPU for the financial year ended 31 March 2008 (“FY2008”) is an additional 0.20¹ Singapore cents per unit, representing an increase of 2.7% from the forecasted FY2008 DPU of 7.41 Singapore cents per unit. The pro forma financial effect of the acquisition on the forecasted FY2009 DPU of 7.59 Singapore cents per unit for the financial year ended 31 March 2009 (“FY2009”) is an additional 0.231 Singapore cents per unit, representing an increase of 3.0%.

.
.

FUNDING
The acquisition of 7 Clementi Loop is expected to be completed by 30 November 2007. The Manager intends to finance the acquisition wholly by debt but may consider alternative funding sources in line with its capital management strategy to optimize the funding of MIREIT. Assuming 100% debt financing and that no other acquisitions occur between now and settlement of the Property, the acquisition will increase MI-REIT’s gearing level from its current level of 8.6% to 13.7%⁵.

.
.

¹ On an annualized basis. Assuming MI-REIT has purchased, held and operated the properties for the financial year ended 31 March 2008 (“FY2008”) and that the acquisition is 100% debt-funded.
⁵ This excludes any debt commitment for the recently announced acquisition of Plot 4A International Business Park, which is due for completion in December 2009.

Source : SGX

MI-Reit to expand into offices and technology parks

THE fourth listed industrial real estate investment trust (Reit) – MacarthurCook Industrial Reit – is extending its investments into offices and technology parks. MI-Reit yesterday announced that it has agreed to buy Plot 4A, International Business Park from Eurochem Corporation (a member of Tolaram Group), for $91 million. This is a 13-storey office park building with a basement car park located in Jurong East’s International Business Park.

MI-Reit’s first investment in offices or technology parks brings it a 20 per cent exposure to the sector.

According to Jones Lang LaSalle Research’s Asia-Pacific Property Digest for Q2 2007, business park rents grew 30 per cent in the quarter while capital values grew 8 per cent.

‘The strongest rental growth of all industrial sub-sectors will be in this sub-category, principally as a result of the tight office supply situation causing a spillover effect as Central Business District tenants relocate to suburban office parks such as the International Business Park,’ said Chris Calvert, CEO of MacarthurCook Investment Managers (Asia), which manages the Reit.

Under this sale and leaseback arrangement, Eurochem – a Singapore- based company in the petrochemical sector – will sign a head lease over the entire facility for 10 years, with an option to extend for another five years.

This will start from the date of completion, scheduled for December 2009.

Mr Calvert added that the acquisition will increase the size of the portfolio from the initial value of $316.2 million at the time of listing in April, to $407.2 million upon completion of the acquisition.

MI-Reit said the purchase will extend its average weighted lease expiry duration from 6.3 years to seven.

To be funded wholly by debt, other alternative funding sources will also be considered, said the manager. MI-Reit’s gearing level will increase from its current 8.6 per cent to 29.1 per cent, assuming 100 per cent debt financing and that there are no other acquisitions between now and settlement of the property.

MI-Reit’s initial portfolio comprised 12 industrial assets across Singapore, the largest of which is UE Technology Park, which was acquired for $115 million.

At the date of listing, the initial properties in MI-Reit had a combined value of $316.2 million.

The Reit invests primarily in industrial real estate assets in Singapore, Japan, Hong Kong, Malaysia and China.

Last month, the Reit reported a distributable income of $3.9 million for its first quarter ended June 30 – 2.9 per cent higher than the forecast $3.8 million. Distribution per unit (DPU) also beat expectations, coming to 1.52 cents, which was 3 per cent higher than the forecast DPU of 1.47 cents.