CRCT – BT
CRCT distributable income rises in Q3
DPU of 2.02 cents as net property income rises 0.7%
CAPITARETAIL China Trust’s (CRCT) third-quarter distributable income inched up to $12.6 million from Q3 2008’s $12.4 million. The China retail trust of CapitaLand announced a distribution per unit of 2.02 cents, up from 2.01 cents.
CRCT, which owns eight retail mall properties located in five key cities in China, saw net property income rise 0.7 per cent to $18.3 million for the three months ended Sept 30, 2009, from $18.1 million for the year-ago period. As at Sept 30, the total asset size of CRCT was about $1.23 billion.
Gross revenue for Q3 2009 was $29.8 million, an increase of 5.4 per cent over Q3 2008. This was mainly due to the appreciation of the Chinese yuan against the Singapore dollar as well as the increase in occupancy rates in Xizhimen Mall and Xinwu Mall. This was partly offset by lower revenue in Wangjing Mall due to asset enhancement works; and Saihan Mall, which is currently still undergoing asset enhancement works.
During the quarter, CRCT implemented measures to re-position the malls for next year. In addition to proactive cost management, the tenant mix was changed to better meet shoppers’ demands. At one mall, Xinwu Mall, rental revenue improved after the introduction of more flexible lease structures through shortened leases and ‘right-sizing’ of retail space.
‘Our business model has proven to be resilient and we are confident that our strategies of fine-tuning the tenant mix, re-positioning of malls and asset enhancement initiatives have made us operationally stronger,’ said Wee Hui Kan, chief executive of CRCT’s manager. ‘This will position us in good stead for 2010 and we remain committed to ensuring a stable and sustainable distribution to unitholders.’
CapitaLand on Oct 5 said that it will spin off its $20.3 billion retail portfolio into a separate unit, and list it on the Singapore Exchange. CRCT will be held under the new unit (CapitaMalls Asia) in future, and will continue to enjoy the existing rights of first refusal it has from the group.
CRCT shares close unchanged at $1.19 yesterday.
CRCT – CNA
CapitaRetail China Trust says Q3 distributable income, DPU up slightly
CapitaRetail China Trust (CRCT) said on Friday that its third quarter distribution per unit (DPU) is 2.02 cents. This is 0.5 per cent higher than the 2.01 cents DPU announced over the same period last year and 4.5 per cent more than the previous quarter’s DPU.
Distributable income for the period ended in September is S$12.6 million, 1 per cent more than last year’s S$12.4 million. Net property income was also marginally higher at S$18.2 million, an on-year increase of 0.7 per cent.
CRTC said appreciation of the Chinese yuan against the Singapore dollar and an increase in occupancy rates boosted its earnings. It added that retail sales in China remained strong, underpinned by the Chinese government’s measures to increase domestic consumption.
CRCT remains confident of its ability to refinance its debts when they mature, with interest rates expected to be in line with general market conditions.
FSL – CNA
FSL Trust’s DPU down 51% to 1.5 US cents
Mainboard-listed First Ship Lease Trust (FSL Trust) announced on Friday, a 1.5 US cent distribution per unit (DPU) for the third quarter ended in September.
The figure is 51 per cent lower than the 3.05 US cent DPU for the same period last year.
The amount to be distributed is US$7.96 million – an on-year drop of 48 per cent.
Going forward, FSL Trust said that its business is robust and its portfolio of lease contracts will continue to deliver predictable and stable cash flows.
FCOT – CNA
Frasers Commercial’s DPU & distributable income fall on-year
Frasers Commercial Trust (FCOT) announced on Friday a third quarter distribution per unit of 0.2 cent.
That is 26 per cent lower than the 0.27 cent DPU for the same period last year, after making adjustments for a rights issue.
Distributable income for the period ended in September fell by 24 per cent on-year to S$6.14 million, though it was up by 10.4 per cent when compared to the previous quarter.
Net property income suffered a less drastic drop, declining 0.6 per cent on-year to S$19.9 million. Compared to the previous quarter, FCOT said its net property income increased by over 13 per cent.
The improvement was driven by the initial five weeks of ownership of Alexandra Technopark, a stronger Australian dollar and better occupancy levels.
FCOT said the last stage of its recapitalisation and refinancing will be completed in the next quarter.
Earlier this year, it announced a rights issue to raise S$214 million.
CMT – JPM
3Q09 results above expectation, AEI to restart
• CMT announced 3Q09 results, DPU of S$0.0235/unit, annualizing 5.4% yield. The trust retained 3.2% of its distributable income for 4Q09. Distributable income YTD hit S$213million, 4% ahead of our estimates and consensus estimates on the back of better than expected rental income. We have therefore raised our DPU estimates by 4 – 5% for 2009 – 2011. Stock will trade ex-3Q09 distribution on 28 Oct 09.
• Raffles City AEI announced. The trust re-started its AEI program after putting it on hold for a year. Management intends to create a new underground link at basement 2 of Raffles City and to reconfigure its basement 1. CMT planned to spend a total of S$33mil capex targeting 8% ROI for this AEI, and we estimate a 1% accretion to CMT’s FY11 DPU. In addition, the trust is in the process of planning for a complete refurbishment of Jurong Entertainment Centre (JEC), and we expect a detailed plan, including required capex, to be announced in 4Q09.
• Short term volatility expected. With CapitaLand undergoing its proposed restructuring of its shopping mall business, we believe CMT’s share price is likely to remain volatile in the short run, especially as investors make up their mind to the specific risk/return profile they are seeking. We believe, however, that CMT will remain as the liquid proxy for Singapore retail real estate, offering a stable return profile. In addition, with its portfolio size now at S$7bn, the trust has the capacity to take on small development projects, and we would watch out for the upcoming tender (10th Nov 09) for Clementi Mall, a semi-completed suburban mall at the Clementi Bus Interchange.
• We reiterate our OW rating, and raise our Dec-10 DDM based price target to S$2.00/unit. Key risks to our rating and price target include a worse than expected rental reversion and long term rent growth; or a
re-tightening of the credit market.