K-REIT – BT
K-Reit Q3 DPU up 16%
K-REIT Asia yesterday posted a distribution per unit (DPU) of 1.96 cents for the third quarter – 16 per cent higher compared with a year ago.
The annualised DPU works out to 7.78 cents, generating a distribution yield of 7.7 per cent based on K-Reit’s closing unit price of $1.005 as at Sept 30.
The improvement in DPU came on the back of a 17.7 per cent rise in distributable income to unitholders to $26.7 million.
Powering the increase in distributable income was a surge in contributions from associated companies, including one which owns Marina Bay Financial Centre Towers 1 & 2 and Marina Bay Link Mall. K-Reit’s share of results of these companies reached $10.9 million, which is 5.6 times that of last year’s $1.9 million.
Higher share of profits from associated companies helped to make up for a 16.3 per cent drop in net property income to $14.7 million. The decrease was partly due to the divestment of Keppel Towers and GE Tower last year.
For the nine months ended Sept 30, K-Reit’s DPU was 5.68 cents, up 22.2 per cent year on year. On an annualised basis, its DPU came up to 7.59 cents.
Distributable income to unitholders rose 23.6 per cent to $77.2 million, driven largely by a higher share of profits from associated companies, as well as higher interest income. These helped to mitigate the impact of an 11.8 per cent fall in net property income to $43.9 million.
K-Reit’s aggregate leverage as at Sept 30 was 39.8 per cent, creeping up from 39.2 per cent in the previous quarter. It has no debt expiring next year while $100 million of debt will be due for refinancing in 2013.
K-Reit’s units gained three cents on the stock market yesterday to $1.03 before the company called for a trading halt in the afternoon, pending its announcement of an acquisition. The counter resumes trading today.
KGT – BT
K-Green Trust’s Q3 earnings down 14% to $3.8m
K-GREEN Trust reported third quarter earnings of $3.8 million, down 14 per cent from $4.4 million in the same quarter last year.
Third quarter revenue likewise fell 5.8 per cent to $24.6 million from $26.1 million.
For the nine months ended Sept 30, 2011, Singapore’s only listed green infrastructure trust recorded profit after tax of $11.7 million, 14.6 per cent higher than the $10.2 million projected.
Turnover for the period was $69.7 million, beating projections of $57.5 million by 19.5 per cent.
The group said comparing nine-month 2011 statements with the previous corresponding period was ‘not meaningful’ because K-Green Trust only owned one of the current three plants in its portfolio for the full nine-month period in 2010.
The Senoko waste-to-energy plant was acquired on Aug 31, 2009. However, the Tuas waste-to-energy plant and Ulu Pandan NEWater plant only started contributing to K-Green’s financials after they were acquired on June 29, 2010, the day when the business trust was listed.
Earnings per unit for the third quarter was 0.6 cents, down from 0.7 cents last year.
The group’s assets totalled $714.2 million as at end-September 2011, $47.7 million lower than at the previous year’s end. Net asset value per unit for the quarter decreased to $1.10 from $1.16.
The group had no external borrowings as at Sept 30, 2011.
K-Green said its three assets’ income comes from capacity payments that offer ‘stable source of income with little correlation to economic or demographic fluctuations’.
It is still interested in acquiring more assets, and highlighted four plants to which it has rights of first refusal.
Three are district cooling plants in Singapore located in Biopolis, Changi Business Park and Woodlands Wafer Fab Park.
The other is a Sweden-based waste-to-energy plant that is 22 per cent owned by Keppel Seghers.
K-Green Trust closed unchanged at 90 cents yesterday.
A-REIT – BT
A-Reit Q2 net property income up 7.9%
Distributable income climbs 14.1% to $70.5 million
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday posted net property income of $90.6 million for the second quarter ended Sept 30, up 7.9 per cent from a year ago.
Distributable income climbed 14.1 per cent to $70.5 million, translating to distribution per unit (DPU) of 3.38 cents, a 2.4 per cent increase over the 3.30 cents posted a year ago.
For the half-year ended Sept 30, A-Reit’s net property income rose 4.7 per cent from a year ago to $179.3 million.
Distributable income grew 9.2 per cent to $136.4 million.
The half-year DPU stood at 6.58 cents – 1.3 per cent less than the 6.67 cents a year ago.
Adjusting for new units issued, the proforma DPU last year would have been 6.03 cents, leading to a 9.1 per cent gain.
As at Sept 30, A-Reit’s portfolio comprised 94 properties with a total asset value of about $5.7 billion.
Some of its investment highlights include Nordic European Centre, Ascendas Z-Link in Beijing, China (its maiden acquisition of a business park facility in the region), and the forward purchase of a business park property in Jinqiao, China, totalling $301.0 million.
A-Reit’s portfolio occupancy improved to 96.4 per cent of the portfolio, and 93.0 per cent for the multi-tenanted buildings from 96.2 per cent and 92.5 per cent in the previous quarter respectively.
It also enjoyed positive rental reversions of between 1.8 per cent and 11.6 per cent across all segments of its portfolio, the company said.
Within its portfolio, tenants from the electronics sector account for about 11.9 per cent of A-Reit’s portfolio gross revenue.
In terms of leases, 48 per cent are long-term versus 52 per cent short-term by asset value, with a weighted average lease to expiry of about 4.3 years.
A-Reit’s aggregate leverage ratio as at Sept 30 was 31.5 per cent, an improvement over the 34.3 per cent last year.
Even after funding committed investments of about $255 million, debt ratio will hit 34.5 per cent, giving headroom of about $555 million to reach 40 per cent aggregate leverage, the company noted.
A-Reit fell half a cent yesterday to close at $1.995.
CRCT – DBSV
Maintaining an upward momentum
At a Glance
• 9M11 DPU forms 75% of FY11 DPU
• Good underlying performance, double digit rental reversion growth rate of 11.9%
• Maintain Hold at a revised TP of S$1.31
Comment on Results
In line with expectations. Underlying 3Q revenues in RMB terms grew by 21.6% supported by robust performance across all malls as well as the maiden contribution from Minzhongleyuan Mall. However, the strong S$ continued to erode topline and NPI growth to a lower 13.7–13.8% y-o-y to S$33.8m and S$21.7m respectively. 3Q distribution income was 1.9% higher at S$14.6m (DPU of 2.12Scts). 9M DPU of 6.42cts forms 75% of our full year forecast.
Strong underlying performance. CRCT’s malls saw another consecutive quarter of double digit rental reversion growth rate of
11.9% for 173 new and renewal leases in 3Q. Overall occupancy stabilised at 97.7%, with Mingzhongleyuan Mall’s occupancy rising from 90.6% to 94.8%. Tenant sales jumped 21.1% yoy supported by a 2.9% growth in shopper traffic. Going forward, earnings are likely to see steady growth momentum with about 7.0% and 25.5% of gross rental income expiring in FY11 and FY12 respectively. The opening of three Metro lines and North railway station which is connected to Xizhimen Mall is likely to drive footfalls and boost retail sales.
Gearing remains healthy at 31.4 %. The refinancing is expected to be concluded in 4Q11 and would further extend its current 1.56 year debt maturity profile.
Recommendation
Likely to be affected by continued gradual SGD appreciation, Maintain Hold. We like CRCT’s pro-active leasing strategy and ability to drive rental renewals and occupancies. We believe DPU growth will continue to be dampened by further but more gradual appreciation in the S$. The stock is currently trading at FY12 DPU of 7.4%. Maintain Hold at revised DCF-backed target price of S$1.31 as we roll forward to FY12 numbers.
CRCT – BT
CapitaRChina Q3 distribution income rises
Quarter’s DPU climbs to 2.12 cents as new mall helps lift revenue
CAPITARETAIL China Trust’s third-quarter income available for distribution rose 12.3 per cent to $14.6 million, buoyed by contributions from a recently acquired mall and higher revenue from its other malls.
Distribution per unit for the quarter rose to 2.12 cents, from 2.08 cents a year ago. Its revenue rose 13.7 per cent year-on-year to $33.8 million for the July-September period, while net property income increased by 13.8 per cent to $21.7 million. In yuan terms, gross revenue rose by 21.6 per cent, or 31.7 million yuan, to 179.0 million yuan.
Its revenue was lower than forecast when measured in Singapore dollars, due mainly to a stronger Singapore dollar against the yuan when compared with the rate used in the forecast. The Q3 revenue jump was due mainly to a 13.6 million yuan contribution from CapitaMall Minzhongleyuan in Wuhan, the property trust’s newest mall, which was acquired on June 30.
Still, on a comparable portfolio basis, the trust’s net property income grew by 13.4 per cent in yuan terms, demonstrating its ability to generate organic growth from its malls, said Tony Tan, chief executive of the trust’s manager.
The trust’s portfolio now comprises nine shopping malls in China – four in Beijing and one each in Shanghai, Zhengzhou, Huhhot, Wuhu and Wuhan. Its total asset size at end-September was some $1.4 billion.
Tenant sales at the trust’s five multi-tenanted malls rose by 21.1 per cent year-on-year in Q3, Mr Tan said. ‘We continue to register strong rental reversion of 11.9 per cent across the portfolio this quarter.’
For the nine months to end-September, distribution per unit was 6.42 cents, compared to 6.29 cents last year.
Gross revenue for the January-September period rose 7.4 per cent to $95.4 million, compared to last year, while net property income increased 8.3 per cent to $63.0 million.
‘China’s economic fundamentals remain strong and we continue to be positive on our prospects in China,’ Victor Liew, chairman of the trust’s manager, said. ‘China continues to be a key market for international and domestic retailers.’
The trust’s units last traded at $1.17 yesterday before the results were announced, unchanged from Thursday’s closing price.