FCOT – SGX
FCOT achieves an 82% increase in distributable income for 2Q DPU up 78%; total distributable income (including CPPU) up 167%
Singapore – 22 April 2010 – Frasers Centrepoint Asset Management (Commercial) Ltd (“FCAMCL” or the “Manager”), the manager of Frasers Commercial Trust (“FCOT”, SGX:FrasersComm) is pleased to announce the Trust’s financial results for the second quarter ended 31 March 2010.
Operationally, for the financial quarter, 1 January 2010 to 31 March 2010 (2Q FY09/10), gross revenue and net property income are respectively 24% and 26% above those of the same period last year.
Total distributable income was up by 167% year-on-year from S$5.42 million to S$14.48 million, of which S$4.65 million is available for distribution to Series A Convertible Perpetual Preferred Units (“CPPU”) holders.
Distributable income to Unitholders increased by 82% to S$9.84 million. This translates to distribution per Unit of 0.32 cents, up by 78% from a year earlier and by 33% when compared to the preceding quarter.
A total distribution of 0.56 cents per Unit and 2.74 cents per CPPU for the first half FY09/10 will be paid on 27 May 2010. Based on the last closing price of the Units of $0.14 on 22 April 2010, this translates to an annualised yield of 8.0%. CPPU holders who hold the CPPUs transferred to them as at books closure date will receive a pro-rata distribution of 0.3466 cents per CPPU for the period from 9 March to 31 March 2010(1). The distribution books closure date for both the Units and CPPUs is 3 May 2010.
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Cambridge – SGX
Singapore, 21 April 2010 – Cambridge Industrial Trust Management Limited (“CITM”), the Manager (“Manager”) of CIT, announced that CIT achieved gross revenue of S$18.6 million and a net property income (“NPI”) of S$16.3 million for its 1Q2010 financial results. “CIT has achieved a set of stable first quarter financial results for its Unitholders.
Unitholders will receive a DPU of 1.274 cents, which will be payable on Monday, 14 June 2010,” said Mr. Chris Calvert, Chief Executive Officer of CITM. “While the outlook for 2010 has improved, we remain cautiously optimistic of a full economic recovery. This further reinforces the need for management to maintain its disciplined strategy of prudent capital and risk management, pro-active asset management and the divestment of noncoreassets that do not meet the Trust’s investment criteria.”
1Q2010 NPI increased by 1.2% to S$16.3 million in comparison to 1Q2009. The increase is attributed to rental escalations and the improved occupancy in CIT’s two multi-tenanted properties. 1Q2010 NPI was marginally lower by 2.4% in comparison to 4Q2009, predominantly due to a reduction in rental revenue arising from asset disposals (i.e. 32 Urbanstrata units at 48 Toh Guan Road East, Enterprise Hub were divested during 1Q2010).
Total gross sale proceeds of S$21.5 million exceeded book value by S$1.6 million. “Divestment proceeds will be used to lower CIT’s gearing level where they cannot be reinvested into the Trust’s existing assets to create additional capital value. The Manager expects gearing level to be around the 38% mark by the end of 2010,” highlighted Mr. Calvert.
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CMT – BT
SINGAPORE – CapitaMall Trust (CMT) posted a net property income of $97.7 million for its first financial quarter ended March 31, 2010, up 5.7 per cent from a year ago.
As a result, distributable income to unitholders rose. It was $71.1 million, up 13.6 per cent.
Distribution per unit (DPU) in Q1 was 2.23 cents, 13.2 per more than the same period last year.
CMT said in a news release on Wednesday: 'the improved performance was mainly due to upside from an increase in gross revenue arising from full contribution from Sembawang Shopping Centre upon the completion of asset enhancement works, higher rental rates for new and renewed leases and lower operating and interest expenses.'
Book closure is on April 29,2010.
A-REIT – Daiwa
Soft occupancy remains a concern
What has changed?
• Ascendas Real Estate Investment Trust (AREIT) announced its 4Q FY10 results on 19 April 2010. The distribution per unit (DPU) of 2.73¢, down 16.6% QoQ, was 10.8% below our forecast.
Impact
• Net-property income (NPI) was 8.7% below our forecast on lower-than expected revenue (due to a lower overall occupancy rate of 95.7% as at 31 March 2010 versus 96.5% as at 31 December 2009, and the decommissioning of 1 Senoko Avenue for redevelopment) and higher-than-expected expenses due to the expiry of the property-tax rebates, and higher utilities and ad-hoc maintenance charges.
• After fine-tuning our assumptions, we have revised up our DPU forecasts by 0.5% for FY11 and 1% for FY12. We have also revised down our net-property income (NPI) forecasts by about 1%, but have also adjusted downward our finance-cost assumptions by about 8% after the manager locked in its borrowing costs for the next 3.1 years at 3.94% p.a. (fixed rate). It also redeemed €165m of CMBS ahead of its expiry in 2012, and issued S$300m of 2015 exchangeable collateralised securities (ECS) at a coupon of only 1.6%.
Valuation
• We have raised our six-month target price, based on parity with our RNG valuation (a finite-life Gordon Growth model) slightly, to S$1.68 (from S$1.66). We have not changed our effective cap-rate assumption of 7% (consisting of an assumed discount rate of 8.5% and an internal growth rate of 1.5%).
Catalysts and action
• We maintain our 4 (Underperform) rating for AREIT, which trades at a price to to NAV (as at 31 March 2010) of 1.26x. We regard the FY11 DPU yield of 7.0% as rich, considering that the prevailing cap rate for the portfolio is also about 7%. We believe AREIT has room for some acquisitions, but with an overall occupancy rate (91.2% for its multi-tenanted properties versus 93.1% in previous quarter) that still appears delicate (in our opinion) and some refinancing requirement for FY11, we expect the manager to tread cautiously during this recovery phase.
CMT – DBSV
Revving all engines
At a Glance
• Results in line
• Revving organic and AEI growth drivers
• Maintain Buy, TP $2.02
Comment on Results
Results in line with street estimates. 1Q10 revenue was up 3.4% yoy to $139.1m while NPI grew a better 5.7% to $97.7m on lower expense ratio of 30%. Distribution income (after retaining $9.5m of income and CRCT dividend) increased 13.6% yoy to $71.1m on lower interest cost. During the quarter, 132,107sf NLA (4.3% of total) of space were renewed at an average 6.2% higher rate than previously while occupancy slipped marginally to 99.4% due to the termination of a mini-anchor tenant at Plaza Singapura.
Revving all engines. Looking ahead, earnings will be driven by organic rental hikes, AEI and new acquisitions/ developments. As in 1Q10, leases are re-contracted at higher levels and we believe this trend could continue given the improving economic outlook. In addition, progressive completion of AEI works at Raffles City basement, J8 and Tampines Mall from 2Q10 onwards and the rebuilding of JEC by early 2012, would provide new fuel to grow income stream in the medium term. The purchase of Clarke Quay, at NPI yield of 5.6%, could add an estimated 0.1cts to FY10 DPU. On the capital management side, recent issues of S$200m and US$500m MTN helped to diversify its funding sources, extend maturity profile as well as unencumber assets. The group would also focus on rolling over $1.057b worth of loans and CBs that are due in 2011.
Recommendation
Maintain Buy, TP $2.02. We maintain our Buy call on CMT with a TP of $2.02, translating to a total return of 13.6%. In addition to good organic growth prospects, we believe CMT is well placed to acquire new assets or development activities with a strong balance sheet and low gearing of 34.7%. These have not been factored into our current valuations and could provide further upside to our numbers when actualized.