CRCT – BT
Strong Sing$ eats into CRCT’s Q3 earnings
Income available for distribution for the period up 3.2% at $13m
CAPITARETAIL China Trust (CRCT) posted improved third-quarter earnings yesterday, although the strengthening Singapore dollar took some shine off its results.
CRCT’s eight malls in China brought in a gross revenue of 147.2 million yuan (S$29.8 million) for the quarter ended Sept 30 – up 4.5 per cent from a year ago as some malls collected more rent. Net property income rose 9.1 per cent to 94.2 million yuan.
Converted to Singapore dollars, however, gross revenue slipped 0.2 per cent from last year to $29.8 million, while net property income increased by a smaller 4.3 per cent to $19 million.
‘The lower growth in Singapore dollar terms was due to the stronger Singapore dollar against yuan between Q3 2009 and Q3 2010,’ CRCT said.
Income available for distribution for Q3 rose 3.2 per cent year on year to $13 million. This sent distribution per unit (DPU) up 3 per cent to 2.08 cents.
The annualised DPU works out to 8.25 cents. Based on CRCT’s closing unit price of $1.25 on Sept 30, the annualised distribution yield is 6.6 per cent. The counter closed one cent up at $1.25 yesterday.
CRCT’s gearing as at Sept 30 was 33.7 per cent, slightly higher than the 33 per cent a year ago.
CRCT’s manager, CapitaRetail China Trust Management, is optimistic about prospects.
According to its chairman, Victor Liew, China’s total retail sales of consumer goods rose 18.2 per cent year on year for the first eight months of the year.
Tony Tan, CEO of the manager, also said that there had been ‘positive rental renewal momentum’ at CRCT’s malls.
PST – BT
PST Q3 profit rises 3% to US$7.2m
PACIFIC Shipping Trust’s distribution per unit for the third quarter ended Sept 30, 2010 inched up 1.7 per cent to 0.832 of a US cent, up from 0.818 US cent for the same period a year ago.
Distributable income also barely budged, up 2 per cent from US$6.89 million to US$7.04 million for Q3.
For the nine months ended Sept 30, 2010, distributable income stayed flat at US$20.08 million against last year’s US$20.06 million.
Income to be distributed for the quarter stood at US$4.9 million, but was 13 per cent lower for the nine-month period, at US$14.3 million due to an increase in the income to be retained for working capital.
For the nine months ended Sept 30, 2010, income to be retained for working capital more than doubled year on year, from US$6 million to US$13.9 million.
Gross revenue from its 12 long-term charter vessels also stayed flat at US$15.6 million and US$45.9 million for the quarter and nine-month period, respectively.
Net profit crept up 3 per cent to US$7.2 million for the quarter and up one per cent to US$20.5 million for the first three quarters of 2010.
The trust has been going on a spree of sorts this year, buying two capesize bulk carriers in late-June and two multi-purpose vessels this month.
The multi-purpose vessels will be backed by a 10-year time charter contract with Cosco Xiamen, which will boost Q3 2012 revenue.
‘We are pleased to have delivered on our promise to unitholders to widen our charterer and asset base,’ said Teo Choo Wee, the acting chief executive officer of PST Management Pte Ltd, the trustee-manager of the trust.
‘The fact that we could conclude these two deals recently is a testament to our strong credibility in the shipping fraternity.’
The trust is expecting its gross revenue to increase next year, helped along by 10-year time charters for two 180,000 deadweight tonne capesize bulk carriers to Jiangsu Shagang Group Co Ltd.
‘We have been proactively managing charter revenue to ensure that PST more than replaces the revenue from vessels that will be coming off-charter,’ said Mr Teo.
The books’ closure date is Oct 28 and payment will be made on Nov 29.
MIT – BT
MIT’s IPO 38 times oversubscribed
Trust expected to raise as much as $1.19b in gross proceeds from IPO
Mapletree Industrial Trust’s (MIT) initial public offering (IPO) saw a strong take-up rate with an oversubscription of about 37.9 times, led by demand from institutional players.
The take-up means that more than $20.1 billion in total of application money was made available for the IPO, MIT said yesterday.
MIT is expected to raise as much as $1.19 billion in gross proceeds from its IPO, if an overallotment option of 91.75 million units is exercised.
Mapletree is selling 1.28 billion MIT units at 93 cents apiece. This includes some 595 million units, comprising 489 million units that were placed out and 106 million units that were sold to the public.
Six cornerstone investors, namely AIA, Prudential Asset Management (Singapore), Henderson Global Investors, Columbia Wanger Asset Management, US investment firm DE Shaw and Dutch pension fund APG, will subscribe for a separate 323 million units.
Mapletree’s two subsidiaries, Mapletree Dextra Pte Ltd and Sienna Pte Ltd, will also subscribe for 359 million units, giving Mapletree a post-IPO stake of about 31 per cent if the greenshoe option is fully exercised.
The placement tranche of 489 million units was oversubscribed by 39.6 times, with a total value exceeding $18 billion.
The public tranche included 25.5 million units reserved for subscription by the directors, management, employees and business associates of Mapletree.
The remaining 80.6 million units, representing about 6.3 per cent of the total unit sale (excluding the overallotment), was about 27.7 times oversubscribed, translating to total value of about $2.1 billion.
MIT’s offer price represents an annualised distribution yield of 7.6 per cent for fiscal 2010, which is estimated to rise to 8 per cent for fiscal 2011.
It expects to pay out all of its distribution income to unitholders from listing until March 31, 2012, MIT said at a briefing last week.
MIT, which is the third real estate investment trust to be launched by Temasek Holdings’ Mapletree Investments, has a portfolio of 70 industrial properties in Singapore.
Global Logistic Properties (GLP) also saw firm interest in its IPO, which was more than 12 times oversubscribed.
Out of the 88,393 public offer applications for GLP, 85,136 applications, or 96 per cent, were successful ones.
The balloting results of the GLP applications also threw up some startling numbers. It showed that there were 22 successful applicants from the public who had initially applied for at least one million shares, coughing up at least $1.96 million upfront.
They were eventually allotted 10,000 shares each.
Shares of GLP continued their uptrend yesterday, gaining 5.53 per cent or 12 cents to end at $2.29. It was the most active stock on the Singapore Exchange, with 262 million shares changing hands.
Trading of the units of MIT is expected to start tomorrow at 2pm.
K-REIT – Lim and Tan
• K-Reit expects its DPU for 2011 to be 10.2% higher at 6.68 cents as a result of the recent transactions:
a. acquisition of 77 King Street property in Sydney for A$120 mln / S$145 mln and announced in July;
b. acquisition of one-third stake in Marina Bay Financial Centre‘s Towers ! & 2 for $1,426.8 mln;
c. disposal of GE Towers and Keppel Towers for $573 mln.
• K-Reit will borrow a net S$821 mln for the latest transactions, and will not issue new units.
• At $1.37, prospective yield is 4.9%.
• K-Reit merits an upgrade to BUY with the removal of the “uncertainty”, whether the Singapore transactions would be yield accretive.
(For Q3 ended Sept ’10, K-Reit’s Distributable Income rose 26% to $22.7 mln reflecting the additional 29% interest in Prudential Tower as well as the 50% stake in 275 George Street, Australia. DPU for the first 9 months came to 4.65 cents or 6.22 cents annualized.)
K-REIT – CIMB
Positives priced in
• 3Q10 in line; maintain Underperform and target price of S$1.26. 3Q10 DPU of 1.69 Scts met our expectation and consensus, forming 25% of our full-year forecast. 9M10 DPU of 4.65 Scts represents 70% of our forecast, in line considering backend-loaded contributions expected from Australian assets acquired in the year. K-REIT also released a forecast of its consolidated statement from its recent acquisitions and divestments. We fine-tune our FY10-12 DPU estimates by -1% to +1% but keep our DDM-based target price of S$1.26 (discount rate 7.2%) intact. Maintain Underperform with limited accretion from its recent asset swap, and unattractive FY10 DPU yields of 4.8% vs. Suntec REIT’s 6.5% and CCT’s 5.2%. Derating catalysts could include lower-than-expected rental reversions.
• 3Q10 NPI grew 42% yoy. 3Q10 net property income of S$17.5m was up 42% yoy on contributions from additional stakes in Prudential Tower and 275 George Street. A 37% yoy decline in DPU was attributable to an enlargement in its share base after its Nov 09 rights issue though total distributable income grew 26% on the back of the NPI increase. Qoq, 3Q10 DPU was up 3% on lower borrowing costs.
• Occupancy rose to 99.2%. Portfolio occupancy improved 1.3% pts qoq to 99.2%, largely due to new tenants secured at Bugis Junction Towers. Leasing demand was driven by a mix of new tenants and expansion by existing tenants. Though average portfolio rent was not disclosed, we believe this could have been flat or marginally lower qoq. The 100% completion of FY10 rent reviews should, however, help to curb any near-term decline in average portfolio rents.
• Release of forecast statement. Accompanying the results, K-REIT released a FY11 forecast of the consolidated statement from its recent acquisitions (Marina Bay Financial Centre Phase 1 and 77 King Street) and divestment of Keppel Towers and GE Tower. K-REIT’s FY11 DPU estimate of 6.68 Scts for its enlarged portfolio is lower than our assumed 7.23 Scts due to lower rental and occupancy assumptions for its local portfolio. We have kept our FY11 DPU estimate largely unchanged.