Category: MMP
MMP – SGX
Macquarie Bank Ltd has increased it holding from 25.96 % To 26.30 %.
Date of change of Deemed Interest: 10-08-2007
MapleTree, MMP – BT
Mapletree Log, Macquarie MEAG Reit post better income
ANOTHER two real estate investment trusts have reported better performances.
For Mapletree Logistics Trust (MLT), gross revenue for Q2 2007 was $34.1 million, up 82.6 per cent year-on-year.
MLT said that this was mainly due to contributions from 30 new properties acquired during the year.
Compared to a book value of $1 billion a year ago, its portfolio of properties has since doubled to reach $2.1 billion as at 30 June.
Net property income for the quarter was $30 million, up 85.9 per cent, while distributable income attributable to unitholders was $17.7 million, up 83.6 per cent.
Distribution per unit (DPU) for the quarter of 1.59 cents was 33.6 per cent higher year-on-year and 7.4 per cent higher than the previous quarter.
Reiterating MLT’s ‘growth by acquisitions’ strategy, Chua Tiow Chye, CEO of Reit manager Mapletree Logistics Trust Management Ltd (MLTML) said: ‘For the current year-to-date, we have completed $654 million of acquisitions and have another $166 million of acquisitions that have been announced but are pending completion. This means we have achieved 82 per cent of our $1 billion target for 2007.’
Mr Chua also said the MLT’s funding structure will continue to be optimised.
As at June 30, MLT’s leverage ratio was 54 per cent compared to 39 per cent as at March 31, 2007.
At the end of Q2 2007, 55 per cent of MLT’s total borrowings of $1.182 billion were hedged, he added.
In January, MLT raised $349 million through a fund-raising exercise, offering 296.8 million new units. MLTML deputy CEO and CFO Richard Lai said it was ‘exploring various options of going to the markets for fund raising’ for future acquisitions. MLT expects to have a portfolio worth $5 billion by 2010.
About 20 per cent of its future pipeline will come from sponsor Mapletree Investments which is developing projects in Vietnam, China and Malaysia.
MLT’s share price closed at $1.33 per unit, down 3 cents from the previous day.
Separately, Macquarie MEAG Prime Real Estate Investment Trust (MMP Reit) reported yesterday that gross revenue for Q2 2007 increased 5.5 per cent year-on-year to $23.6 million, due mainly to higher-than-expected rents achieved for retail space in the basement of Wisma Atria, as well as for office space.
Contributions from six newly acquired properties in Tokyo were also booked for the first time.
Net property income was up 3.5 per cent at $17.9 million while distributable income was $14.3 million, up 4.7.
The DPU of 1.50 cents for the quarter was 4.2 per cent higher compared to the 1.44 cents achieved for the previous corresponding period.
MMP Reit share price ended the trading day at $1.25 unchanged.
MMP – SGX
MMP REIT REPORTS DPU OF 1.50 CENTS FOR 2Q 2007
HIGHLIGHTS
• 2Q 2007 DPU of 1.50 cents exceeds 2Q 2006 DPU of 1.44 cents by 4.2%
• Significant NAV uplift of 9.8% from revaluation of Singapore properties
• Affirmed Moody’s corporate rating of Baa1 reflects high quality of assets and provides operational and acquisition funding flexibility
SINGAPORE, 26 July 2007 – Macquarie Pacific Star, the Manager of MMP REIT – the S-Reit with the biggest presence in Orchard Road – today announced MMP REIT’s second quarter (2Q 2007) Distribution Per Unit (DPU) of 1.50 cents. Meanwhile, a revaluation of its prime Orchard Road properties raised Net Asset Value (NAV) by 9.8%.
The DPU of 1.50 cents for the period 1 April to 30 June 2007 is 4.2% higher compared to the 1.44 cents achieved for the previous corresponding period. It also beats MMP REIT’s previous record of 1.47 cents achieved for the past two consecutive quarters of 4Q 2006 and 1Q 2007. On an annualised basis, the latest distribution represents a yield of 4.81%.1
Compared to 2Q 2006, gross revenue rose 5.5% to S$23.6 million, due mainly to higher-than-expected rents achieved for retail space in the basement of Wisma Atria, as well as for office space. Contributions from six newly acquired properties in Tokyo, Japan, were also booked for the first time. Net property income was higher at S$17.9 million, despitehigher year-on-year expenses mainly attributed to higher commission paid for new and renewal leases, increased tenancy costs arising from re-positioning of tenant mix, and continued depreciation charges on the escalators that were installed at Wisma Atria’s basement in end 2006.
NAV per unit was S$1.27 as at 30 June 2007, an increase of 9.5% from NAV per unit of S$1.16 as at 31 March 2007. The valuation of MMP REIT’s two prime Orchard Road properties increased by 7.3% from S$1.498 billion in December 2006 to S$1.608 billion as at 30 June 2007, resulting in a revaluation surplus of S$110 million.
Mr Franklin Heng, Chief Executive Officer of Macquarie Pacific Star, said, “Since listing in September 2005, MMP REIT has consistently outperformed IPO projections. For each of the past two quarters, we have paid out record DPU of 1.47 cents. We are pleased to continue to deliver increased returns to unitholders in 2Q 2007 with the DPU of 1.50 cents, a 4.2% increase from DPU of 1.44 cents in 2Q 2006. Total returns for unitholders who have held MMP REIT units since its listing stand at 38.1%.
“In the second quarter of 2007 occupancy for both our retail and office portfolio in Singapore remained high with higher turnover rent contributions from retail tenants during the start of the Great Singapore Sale. In addition, 58,100 sq ft of office renewals and new leases, contracted at an average 60% increase over previous rents, came into effect during the first half of 2007. Asset enhancement at Level 2 in Wisma Atria is now complete, offering shoppers better circulation and an enhanced shopping experience. On an annualised basis, we will achieve a 43% increase in gross revenue from the reconfigured space.”
Portfolio growth strategies
Commenting on organic growth prospects for MMP REIT’s Singapore portfolio, Mr Heng said, “We have started pre-marketing of some 16,781 sq ft of retail space at Level 5 of Ngee Ann City, which will be vacated by the National Library in end February 2008. The average monthly rent of this lease is below prevailing market rates. The space will be reconfigured with a compelling retail concept embracing fashion, beauty and wellness, complementing the existing offering at Ngee Ann City. We are very encouraged by the response from retailers thus far.
“Contributions from the six newly acquired properties in Tokyo commenced in the beginning of June. We expect to deliver greater value to unitholders when income from these properties is fully recognised in the subsequent months.
“Moody’s Investor Service’s affirmation of the Baa1 rating for MMP REIT in May 2007 reiterates the high quality of MMP REIT’s portfolio, which we are building up with acquisitions in the region. The positive rating endorses our proactive asset management and multipronged investment strategy.”
Mr Heng added, “Going forward, we will continue to actively source for more assets in our key target markets, with a view to further diversify MMP REIT’s asset base and earnings stream geographically.”
1 Based on last traded unit price of S$1.25 on 26 July 2007
Source : SGX
MMP – DBS
Looking forward to next year’s bonus
Potential bonus for MMP next year – Toshin lease renewal. We highlight a key point in terms of organic growth for MMP, with its master lease with Toshin up for renewal in June 08. The master lease is expiring in 2013 with an option to renew for another 12 years. Under the lease arrangement, rents are reviewed every three years with a maximum upward revision of 25%. With the master lease currently under-rented at around the S$11 psf level, we think there is a potential for the next rental review to edge towards the higher end of the 25% cap on positive rental revision.
Acquisitions momentum still at an early stage? To recap, MMP has recently begun its cross-border acquisition growth path with i) acquisition of a portfolio of seven properties in Japan for MMP’s debut deal; and ii) 50% of retail asset, Renhe Spring Department Store for RMB150m in Chengdu. Moving forward, MMP has also secured ROFR on vendor Renhe’s property ventures, which could imply an alternative acquisition pipeline for MMP gaining more momentum moving forward in terms of acquisitions in the absence of a developer sponsorship.
Enjoying office rental reversions. With the very tight office supply situation in the CBD, other alternative office locations are also enjoying positive spillovers. Asking rents for Wisma Atria and Ngee Ann City are already at S$13 and S$12 respectively and we expect closing rents to edge upwards.
Maintain Buy with raised TP of S$1.48. We are raising our target price on the premise of two factors: I) Assuming a base case scenario of bargaining power shared between landlord and tenant, we now impute a potential rise in retail rentals for the Toshin lease to 12.5% when the renewal is up; and ii) higher imputed office rents of S$11 and S$12 for Ngee Ann City and Wisma Atria respectively. This leads to our higher DCF-based target price of S$1.48 and maintain our Buy recommendation. Key risks to our recommendation include i) inability by the REIT manager to secure positive renewal rates for the Toshin lease and ii) acquisitions from third-party assets do not gather pace to imply growth justifying yield compression.
MMP – Nomura
MM PRIME, nomura remains STRONG BUY with target price $1.54 (from $1.52)