CLT – BT
Cache posts $12.4m Q1 distributable income
DPU of 1.952 cents is 0.6% higher than document forecast
CACHE Logistics Trust, which listed in April last year, has posted distributable income of $12.4 million in its first quarter, only slightly pipping projections by 0.2 per cent.
Its distribution per unit (DPU) was 1.952 cents, about 0.6 per cent higher than the 1.94 cents forecast in its introductory document.
However, both gross revenue and net property income retreated about one per cent from what were projected. They stood at $14.8 million and $14.4 million, respectively.
ARA-CWT Trust Management, Cache’s manager, said the difference from the projections was ‘due to timing variance of rental step-ups’.
The real estate investment trust (Reit) has recently completed the acquisition of 6 Changi North Way, bringing its portfolio to a total of seven logistics properties in Singapore.
All of them are 100 per cent occupied, with tenants on triple-net master leases and multi-tenancy leases.
What stood out in its first-quarter results were ‘other trust expenses’, which more than doubled to $562,000 from $250,000.
The sharp rise was due to set-up costs in a multi- currency medium-term note programme under its subsidiary Cache-MTN that was not budgeted for in the introductory document.
Cache-MTN was incorporated on Feb 14 to provide treasury services to Cache.
However, these costs will not impact DPU as expenses are not tax-deductible. Cache’s net asset value per unit is currently 90 cents.
It said that it is actively seeking accretive acquisitions in the Asia-Pacific region to continue delivering sustainable distributions and growth to its unitholders. Its gearing stands at 26.4 per cent with about $208.3 million in borrowings as at March 31.
‘With a strong balance sheet and a conservative gearing ratio, Cache is on a strong footing to execute this strategy,’ said the Reit in its financial results yesterday.
Cache’s counter closed unchanged at 94.5 cents yesterday.
StarHill Global – BT
Starhill Global’s Q1 DPU rises to record 1.07 cents
STARHILL Global Reit’s Australian and Malaysian buys last year helped buoy first-quarter income distribution to unitholders.
Income available for distribution grew 27.9 per cent to $24 million. Of this, $20.8 million is for distribution to unitholders, a rise of 13.1 per cent. Another $2.4 million goes to convertible preferred unit (CPU) holders.
Distribution per unit (DPU) to unitholders was a record 1.07 cents, up 12.6 per cent from 0.95 cents last year.
DPU to CPU holders was 1.36 cents.
In January 2010, Starhill Global acquired David Jones Building in Perth. It then added Starhill Gallery and Lot 10 in Kuala Lumpur to its retail portfolio in June 2010.
Starhill Global’s gross revenue and net property income for its first quarter increased 21.9 per cent and 27.2 per cent to $45.8 million and $37.1 million, respectively.
The group said the higher revenue from its properties in Australia, Malaysia and China helped offset dips from Singapore and Japan.
Revenue from its Singapore properties still made up a significant proportion of its portfolio at 60 per cent or $27.6 million.
However, net property income from Wisma Atria and Ngee Ann City edged down 2.4 per cent to $22 million as new and renewed office leases were secured at rates below 2007 peak levels.
In contrast, Starhill Global’s Renhe Spring Zongbei property in Chengdu, China recorded a 27.9 per cent rise in net property income year on year to $3.2 million.
David Jones’ and Starhill Global’s Malaysian malls contributed $2.9 million and $7.6 million, respectively, to net property income.
The Reit’s gearing level was ‘prudent’ at 30.2 per cent, said YTL Starhill Global, the Reit’s manager. It has outstanding debts of $804.4 million with a weighted debt maturity profile of about 2.9 years.
Starhill Global ended half a cent up at 63 cents yesterday.
CDL H-Trust – BT
CDL Hospitality Trusts posts healthy Q1 results
SURGING visitor arrivals and acquisitions helped boost results for CDL Hospitality Trusts (CDLHT) for the first quarter ended March 31. CDLHT – a stapled group made up of CDL Hospitality Real Estate Investment Trust (H-Reit) and CDL Hospitality Business Trust – saw gross revenue jump 21.4 per cent from a year ago to $32.3 million.
It benefited from improved performance at its hotels in Singapore, and a full quarter’s contributions from hotels in Australia it bought in February last year. Net property income rose 21.8 per cent to $30.1 million. Income available for distribution to holders of stapled securities (after deducting income retained for working capital) was $22.8 million – up 17.4 per cent. From this, income available for distribution per stapled security was 2.38 cents – 2.6 per cent higher.
CDLHT’s hotels in Singapore enjoyed a good first quarter as visitor arrivals continued to grow. The average occupancy rate in Q1 was 85.7 per cent, which not only exceeded last year’s 84.3 per cent, but is also the highest recorded for CDLHT in the first quarter of a financial year. The room revenue per available room in Q1 also rose 12.1 per cent year on year to $195.
CDLHT is optimistic about prospects for hotels here. ‘Upcoming new tourism demand drivers in 2011 should continue to contribute to accommodation demand in Singapore,’ said Vincent Yeo, CEO of H-Reit’s manager.
The counter lost one cent on the stock market yesterday to close at $2.04.
HPH Trust – DBSV
Attractive mix of yield & growth
• Dominant container port player in HK and Shenzhen
• Stable 60% EBITDA margin business to support 100% payout policy, with room to grow
• Currently trading at attractive annualized FY11 yield of 6.3%; 10% DPU CAGR expected over FY11-13
• Initiate with BUY, US$1.15 TP based on DCF (7.2% WACC) with FY12 implied yield valuation of 5.8%
Top container port operator in HK and Shenzhen. Hutchison Port Holdings Trust (HPHT) is the largest container port player in HK and Shenzhen, handling 21.2m TEUs in 2010 or 54% of the entire volume handled at deep-water ports in this area. It is sponsored by Hutchison Port Holdings Limited, the world’s top container port operator by gross throughput.
Predictable and growing cash flows. As the market leader in an oligopolistic environment, and operating on a large scale in one of the China’s most important trade hubs, HPHT’s operations are highly efficient and profitable, with a stable and predictable cash flow stream. HPHT is also expanding its capacity in Yantian Port in East Shenzhen to capture the projected continued growth in trade flows into and out of Southern China, a vital economic region of the country. These factors should underpin the Trust’s ability to generate EBITDA margins of close to 60% and grow distributions by about 10% CAGR over FY11-13.
Attractively trading at FY11F annualised yield of 6.3%, growing to 7.1% in FY12F, compared to S-REITs, which are trading at 6.0-6.3% FY11/12F average yield. Our target price of US$1.15 is based on a 3-stage DCF model with a WACC of 7.2% and terminal growth of 1%. Key concerns include HPHT’s vulnerability to global trade cycles and various foreign currency fluctuation risks for HPHT and its unitholders.
FCOT – OCBC
2Q11 annualised DPU yield of 8%; Maintain BUY
2Q11 Annualised DPU Yield of 8%. Frasers Commercial Trust (FCOT) posted it 2Q11 results on Thursday, which was in line with our expectation and street estimates. 2Q11 gross revenue was flattish YoY but rose 2.2% QoQ to S$29.6m. This was due to higher revenue contribution achieved from Central Park and KeyPoint as a result of an increase in occupancy rates, which was offset by the loss of revenue contribution from Cosmo Plaza following its divestment on 18 Jan 2011. This also increased its NPI by 1% YoY and 3.9% QoQ, as Cosmo Plaza has been generating negative NPI since 4Q10. We are also witnessing an improvement in NPI margin, which rose from 78.9% in FY10 to 80.5% in the quarter. Distributable income is up 2.4% YoY and 27.6% QoQ. 2Q11 DPU is 1.61 S-cents, representing an annualised yield of 8%. Gearing also edged down 2% from 1Q11 to 37.8%.
Portfolio Performance. Overall portfolio occupancy grew by 5.9 pp to 97.7% from last quarter. This was boosted by the rise in occupancy for both Singapore and Australia portfolio plus the divestment of Cosmo Plaza. In particular, Australia portfolio has achieved 100% occupancy rates led by new leases by Jones Lang LaSalle and Hamersley Iron. In Singapore, portfolio occupancy rates grew from 97% to 97.4% driven by the commencement of new leases for both 55 Market Street (55MS) and KeyPoint which include Gabriel Law Corporation, Corporate Serviced Offices and L’Oréal. However, 55MS is still experiencing negative rental reversions, with FY11 average passing rent at S$10.50 psf pm while new leases are signed at S$6-S$6.50 psf pm. According to our estimates, 55MS is likely to rise out of negative territory only after 2013. Keypoint is also undergoing negative reversions, albeit at a lesser magnitude with average passing rent and spot rent at S$5.40 psf pm and S$5.10 psf pm respectively; but management expects a turnaround by end of the year.
Looming Dent on Japan Assets. FCOT’s Japan assets account for 9.6% of its gross revenue. We noted that 100% of the leases for the Azabu building in Tokyo and 65.5% for Galleria Otemae in Osaka are expiring by FY12. We remain wary of the prospects in Japan, as office rentals are unlikely to see further uplift after the earthquake episode. Furthermore, some occupiers have postponed or are reassessing their office strategies, which will likely delay the market recovery. In fact DTZ has forecasted Grade A office rents for Tokyo to decline further, only showing growth in 2013. Maintain BUY with a reduced fair value of S$0.89.