PLife – Phillip
Full Year Results
Company Overview
PLife REIT is one of the largest listed healthcare REITs in Asia by asset size. Its mandate is to invest in income producing real estate and/or healthcare-related assets primarily used for healthcare and/or healthcare-related
purposes in Singapore and Asia.
• 4Q11 (FY11) revenue $22.8mn ($87.8mn), NPI $20.8mn ($80.3mn), distributable income $14.9m ($58.1mn)
• DPU for 4Q11 (FY11) at 2.47 cents (9.60 cents)
• Incorporate 95% payout ratio from 2012 to2016
• Upgrade to ACCUMULATE though with a lowered target price of $1.880
What is the news?
PLife REIT delivered another spectacular report card for FY11, with DPU grew 9.2% from 8.79 cents to 9.60 cents. The key performance indicators – gross revenue, net property income, and distributable income for FY11,
together rose in the range of 9.1%-9.6% to $87.8mn, $80.3mn and $58.1mn respectively compared to the preceding year.
How do we view this?
DPU was largely in-line with our expectations, amounting to 99.5% of our full year estimates. The increase in DPU was mainly due to: (1) yield-accretive acquisitions made in 2010/11, (2) upward rental revision of Singapore properties and (3) lower financing costs.
Investment Actions?
High inflationary environment has prompted us to raise our CPI rental review assumption for FY12 from 2.5% to 6% with respect to Singapore properties. While the retention distributable income to take effect in FY12 will net off the gains in the rental growth. FY12 DPU is expected to dip first before heading north in the following years. We rollover our estimates to FY16 and arrive a lower target price of $1.88. Nevertheless, it would be good to accumulate PLife REIT against the backdrop of global uncertainties and high inflationary environment given its resilient and sustainable model.
a-iTrust – DBSV
Loss in translation
At a Glance
• Strong underlying results in 3Q12, forming 72% of full year forecasts
• New developments seeing robust pre-commitments; quarters ahead to record incremental growth
• Maintain BUY, TP of S$0.87 maintained
Comment on Results
16% appreciation of S$ against INR eroded topline growth to a mere 2% y-o-y. Ascendas India Trust’s (a-itrust) reported revenue and net property income (NPI) of S$30.6m (+2% y-o-y) and S$17.5m (+3% y-o-y). In INR terms, underlying operational performance was robust, with topline/NPI each growing by 19% yo-y to INR 1.23bn/INR 0.7bn. Progressive recognition of rental income from new buildings (Zenith, Park Square ad Voyager) was the major contributor. Organically, a-itrust’s portfolio has exhibited resilience with occupancy remaining a healthy 95% supported by strong tenant retention rates of c79%, while renewals remained stable. Distributable income was lower by 12%% y-o-y to S$11.6m (DPU of 1.5 Scts), due to a stronger S$ and higher interest expenses incurred for its developments. Compared to 2Q12, performance was relatively flat.
Park Square opened to a fanfare; Zenith/Voyager seeing positive take-ups. a-itrust officially launched Park Square in Dec11and lease commitments are strong at c.87% – with major anchors to start operations soon. Its other 2 office buildings – Zenith and Voyager – are seeing pre-commitments of 82-98% and should head towards full occupancy soon. Looking ahead, we expect stronger earnings growth as tenants complete their fit-outs in the ensuing months. In addition, we look forward to the impending completion of the two planned operating buildings at aVance Business Hub by March 12. All these point towards a stronger start to FY13. Post acquisition, gearing is estimated to head towards 29%, still comfortable in our view.
Recommendation
BUY with S$0.87 TP based on DDM. While management continues to execute strongly, the strong S$ continues to undermine its ‘true operating performance’. The recent strengthening of the INR-S$, if sustained, should be a bright spot for 4Q results. a-itrust offers attractive FY12-13F prospective yields of 9.5-9.8%.
MIT – CIMB
On track
A dip in Business Park reversionary rents marred an otherwise stellar quarter after itsAugust acquisitions and equity fund-raising. We anticipate continued strength in the other segments which shouldoffsetthe stress in Business Parksgoing forward.
3Q/9M12 DPU meets consensus and our expectations, at 27%/ 78% of our estimates. We keep our estimates and DDM-based target price (disc rate: 8.6%). Maintain Outperform.
Biz Park reversions fell
3Q DPU shrank 9.2% yoy due to new units issued in Aug 11. Qoq growth was a positive 5.4%, led by improved portfolio occupancy (95.1%; +0.6% pt) and positive rental reversions for Flatted Factories (+26.8%), Stack-Up/Ramp-Up Buildings (27.5%) and Warehouses (31.5%) over the last renewal period, typically three years ago. In contrast, reversions in Business Parks fell 9.6%. New leases contracted here averaged S$3.92, 5.1% below renewal rates, hinting at more weakness to come.
Lengthening WALE
As at Dec 11, only 3.2% of its portfolio (by gross revenue) remained due for the rest of FY12. In future renewals, management intends to encourage tenants to take up longer leases of more than three years, to lengthen its portfolio weighted average lease to expiry (WALE) of 2.4 years (vs. REIT peers’ five years or so).
Two AEI projects to take off
Management announced AEI plans for Toa Payoh North Cluster 1 and Woodlands Central Cluster. While costs have not been finalised, capex should be S$30m-40m for each at a yield-on-cost of 9%. When completed, an additional 200,000sf (1% of portfolio GFA) will be created. Completion is anticipated by 2H12 with no major disruptions to revenue contributions. The AEI was catalysed by the expansion plans of existing tenants.
CRCT – BT
CRCT’s Q4 DPU rises 10%
Trust’s 9 income-producing malls ‘operating at close to full occupancy rate of 98.1%’
UNDETERRED by the uncertain global economy, China’s consumers are continuing to spend money – and CapitaRetail China Trust (CRCT) is reaping the benefits.
The real-estate investment trust (Reit) posted strong results for the fourth quarter ended Dec 31, 2011, with distribution per unit (DPU) rising 10 per cent year on year to 2.28 cents.
Total DPU for 2011 rose to 8.7 cents, a 4.1 per cent increase from 2010. The distribution yield is 7.6 per cent, based on CRCT’s closing price of $1.14 on Thursday.
Income available for distribution for the quarter exceeded the forecast by 9.1 per cent and stood at $15.7 million – a 21 per cent increase from the corresponding period a year ago.
For the year, income available for distribution was $57.2 million, 9.6 per cent higher than 2010’s $52.2 million.
Said Tony Tan, chief executive officer of CRCT’s manager CapitaRetail China Trust Management Ltd: ‘We are pleased to deliver a set of strong financial results with our nine income-producing malls operating at close to full occupancy rate of 98.1 per cent.’
CRCT saw its fourth consecutive quarter of double-digit growth in net property income, which rose 17 per cent to 113.5 million yuan (S$22.5 million), while for the full year, this was up 16 per cent at 443 million yuan.
But on a comparable portfolio basis that excludes CapitaMall Minzhongleyuan, which was acquired in June last year, net property income rose 12 per cent year on year.
Gross revenue for the quarter was 181.8 million yuan, an increase of 19 per cent over Q4 2010. In Singapore dollar terms, this was 3.8 per cent higher than forecast. This was mainly due to the contribution of 13.5 million yuan from CapitaMall Minzhongleyuan.
CRCT’s other malls contributed 14.8 million yuan, the increase of which was attributed to higher occupancies achieved in CapitaMall Qibao and CapitaMall Saihan, and higher rental growth in CapitaMall Xizhimen.
With China’s retail sales growing at a robust rate of 17 per cent in 2011, CRCT said that it is ‘confident’ about its prospects in China: ‘Increasing urbanisation, growing disposable income, and pro-consumption government policies will support the sustainable growth of the retail market in China.’
Mr Tan said that asset enhancement and acquisitions will be key drivers of growth in 2012, and added that a sustainable growth rate of 5 to 7 per cent over the next 20 to 30 years would be a ‘reasonable forecast’.
CRCT rose 4.5 cents, or 3.9 per cent, to close at $1.185 per unit yesterday.
PLife – BT
PLife Reit’s distributable income for Q4 up 3.2% at $14.9m
PARKWAY Life Real Estate Investment Trust’s distributable income for Q42011 increased 3.2 per cent to $14.9 million from a year ago, as a result of yield-accretive acquisitions made in Japan, higher rent from existing properties and savings from lower financing costs.
Accordingly, distributable income per unit (DPU) for Q42011 rose to 2.47 cents from 2.38 cents in the previous year, Parkway Trust Management Ltd, the Reit’s manager, said yesterday. Distribution payment is expected on Feb 29, 2012. Distributable income for FY2011 increased 9.2 per cent to $58.1 million, while DPU for the year grew to 9.60 cents from 8.79 cents.
Said Yong Yean Chau, chief executive officer of the manager: ‘Amid ongoing market uncertainty, we are glad to be able to consistently deliver DPU growth to our unitholders.
‘As we focused on consolidating our Japan business during the year, we remained steadfast in strengthening PLife Reit’s financial position and generating organic growth across the portfolio to sustain earnings stability.’
For Q42011, PLife registered gross revenue of $22.8 million, an increase of 6.3 per cent. This was primarily due to revenue contribution from the Japan nursing home acquired in January 2011 and appreciation of the Japanese yen. Revenue growth was further driven by higher rent from the Singapore hospital properties.
For FY2011, gross revenue increased 9.6 per cent to $87.8 million, mainly due to full year revenue contribution from the properties acquired in 2010 and 2011, and higher rent from existing properties.