CDLH-Trust – BT
CDL Hospitality Trusts Q3 income up 30% to $24.4m
CDL Hospitality Trusts (CDLHT) yesterday said that its third quarter distributable income rose 29.7 per cent to $24.4 million, from $18.8 million a year ago.
Distribution per unit for the three months ended Sept 30 was 2.93 cents, 24.2 per cent higher than the 2.36 cents reported for the corresponding period last year.
Net property income for Q3 rose 20.7 per cent to $27.3 million, from $22.6 million in Q3 2007.
CDLHT is a stapled group comprising a real estate investment trust (Reit) and a business trust.
In Q3 2008, the room revenue per available room (RevPAR) for the Reit’s Singapore hotels – Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King’s Hotel and Novotel Clarke Quay – rose to $214, from $176 a year ago. The Reit also owns one hotel in New Zealand – Rendezvous Hotel Auckland.
However, the average occupancy rate fell slightly by about four percentage points to 85.5 per cent as visitor arrivals to Singapore fell. But the Reit was still able to report better earnings as room rates were higher this year.
In particular, the Reit benefited from the strong performance of its hotels during the Formula One Grand Prix, when room rates were about twice the average rates.
‘We are pleased to have been able to report robust growth in this quarter on the base of organic growth across CDLHT’s portfolio of hotels despite turmoil in the global financial markets,’ said Vincent Yeo, chief executive of the Reit’s manager.
CDLHT’s debt-to-asset ratio rose to 19.3 per cent over Q3 of this year as total debt rose to $297 million. The trust has some $220 million of debt due for refinancing in July 2009. Refinancing has yet to be locked in, but the trust is in discussions with banks and chances of securing refinancing are good, said Mr Yeo.
Looking ahead over the short term, the events of the last few months will have some impact on CDLHT’s business, Mr Yeo said.
But the trust is still upbeat about the prospects of Singapore tourism in the future, citing high-profile events such as the Asia-Pacific Economic Cooperation (Apec) conferences in 2009 and the Youth Olympics in 2010 as well as the annual F1 event.
The trust is likely to see mainly organic growth in the short term, but 2009 could provide more opportunities for acquisitions, especially if distressed assets turn up on the market, Mr Yeo said.
CDLHT gained 0.5 cent to close at 59 cents yesterday. The stock has lost 74.9 per cent so far this year.
CDL H-Trust – BT
SINGAPORE – Singapore said on Thursday it will likely miss its targets for travel arrivals and tourism revenues this year after the number of foreign visitors fell for the fourth straight month in September.
Visitors to the city-state totalled 739,000 in September, down 4.1 per cent year-on-year, the Singapore Tourism Board (STB) said in a statement.
Travellers from Indonesia, Australia, China, India and Japan accounted for 52 per cent of the arrivals.
Arrivals fell 4.1 per cent in June, 3.8 per cent in July and 7.7 per cent in August.
The STB said the decline in arrivals reflects the global economic slowdown, while the gloomy outlook for the tourism sector is likely to continue into next year.
‘With the current global economic climate, there is now a general air of uncertainty which has impacted consumer sentiments and discretionary spending.
‘Visitor arrivals and tourism receipts are expected to fall short of the 2008 targets,’ it said.
Singapore has aimed to attract 10.8 million visitors and earn tourism revenues of $15.5 billion (US$10.6 billion) this year.
The decline came even after Singapore hosted an estimated 40,000 foreign visitors for Formula One’s first ever night race on September 28. — AFP
Cambridge – BT
Cambridge Industrial Trust Management(CITM), the manager of Cambridge Industrial Trust (CIT), has announced a distribution of 1.490 cents per unit for the quarter July 1 2008 to Sept 30 2008.
Net property income exceeded forecast by 8.0 per cent while distributable income exceeded forecast by 8.2 per cent, it said. Its annualised DPU of 5.928 cents represents a 7.0 per cent increase over the forecast DPU for the same period.
Said Ang Poh Seong, CEO of the manager: ‘We are pleased to report another set of steady results for 3Q2008 despite the negative economic climate. These results underscore the defensive nature of the industrial sector in general and CIT in particular.’
At Sept 30 2008, CIT’s occupancy rate remains at 100 per cent and it is on track to complete its refinancing, it said.
LMIR – OCBC
Pays out 1.6 S cents for 3Q
Pays out 1.6 S cents. Lippo-Mapletree Indonesia Retail Trust (LMIR) posted S$26.6m in gross revenue in 3Q08, up 8.4% QoQ. Revenue was also 27% higher than guided at LMIR’s IPO last year; primarily due to contributions from post-IPO acquisition Sun Plaza. LMIR’s net property income of S$25m was also 27% higher than the trust’s guidance. However, 3Q profit after tax of S$6.6m was 55% lower than guided because of unrealized losses on both foreign exchange forward contracts and interest rate swaps. Distributable income was up 7% QoQ and 11% higher than LMIR’s guidance. The results were generally in line with our expectations. As of 3Q, LMIR has a very low leverage level of about 9% with no refinancing risk until 2013. The trust will pay out 1.6 S cents for the quarter (35% annualized yield).
Share price down 69%. Since our last report in July, LMIR’s share price has fallen 69% to 18.5 S cents. In contrast, the FTSE S-REIT index has fallen about 50% over the same period. Current price levels also mark a 77% decline from LMIR’s 80 S cents IPO price (November 2007). We think the biggest factor behind the decline has been currency movements against a backdrop of extreme risk aversion. The Indonesian Rupiah (IDR) has devalued about 12% against the Singapore dollar since January, with the biggest spike in the past month itself. Meanwhile, forward rates (Bloomberg) are pricing in exchange rates not seen since the Asian Financial Crisis.
DPU protected, but not NAV. The continued forex volatility should be of limited concern to LMIR investors focused on income, as the trust has hedged both its SGD-denominated distributions and interest expense (debt is SGD-denominated). While SGD-IDR volatility will not threaten investor income, it could affect NAV. LMIR is currently trading at a very low P/Book ratio of 0.2x (based on historical values), but these asset values do not reflect current exchange rates. Investors could see asset values falling in SGD terms and this may also affect gearing levels.
Maintain BUY. We have tried to incorporate these concerns into our valuation. At the same time, we think the retail story in Indonesia is still compelling. The country’s domestic economy has been relatively insulated from recent troubles, especially as the threat of inflation subsides. We take a more cautious view on our assumptions on rental growth, discount rate, and cap rates. Our new fair value estimate is 27 S cents (previously 70 S cents). Maintain BUY.
MP REIT – BT
YTL snaps up interest in Macquarie Reit for $285m
Price is 52% above its last traded price, but 49% discount to net asset value
Malaysian conglomerate YTL Corp yesterday took over the Macquarie Group’s entire interest in Singapore-listed Macquarie Prime Reit in an all-cash deal worth $285 million.
YTL said it was paying 82 cents a unit for 247.1 million units in the Reit, about 26 per cent of the total, valuing the stake at $202.6 million.
The price is a 49 per cent discount to Macquarie Prime Reit’s net asset value, and a 52 per cent premium over its last traded price on Friday of 54 cents. Trading in Macquarie Prime was halted yesterday for the announcement.
The remaining $80 million is for Macquarie’s 50 per cent stake in the Reit manager, which will allow YTL to control the Reit, YTL Group managing director Francis Yeoh told reporters here yesterday.
Noting that the deal provides a 2009 yield of about 9.4 per cent, based on Bloomberg consensus estimates, Mr Yeoh said it offers ‘very compelling returns in Singapore dollar terms’ and illustrates his optimism about the Singapore property space.
The Reit currently owns $2.2 billion of retail and office properties in Singapore, Japan and China. It has stakes in Wisma Atria and Ngee Ann City along Orchard Road.
YTL is separately developing two luxury villas on Sentosa Island and last year bought the prime Westwood Apartments site at Orchard Boulevard for $435 million.
‘I’m very confident Singapore will pull through this little turbulence… Even if they have a crisis they will always come out ahead of the curve,’ he said. Mr Yeoh will be appointed the Reit manager’s executive chairman once the deal is completed.
Mr Yeoh said Macquarie Prime will be rebranded Starhill Global Reit and will be YTL’s main vehicle for strategically acquiring yield accretive prime retail space in Asia and the West. He added he will be working with principals in the fashion, food and watch and jewellery industries to boost yields in its luxury malls.
Keith Magnus, Merrill Lynch’s head for Singapore and Malaysia investment banking and YTL’s strategic adviser for the transaction, said: ‘Challenging equity and debt conditions on account of the sub-prime crisis and tightening credit market conditions have led to attractive valuations.’
In February this year, Macquarie Prime, then known as Macquarie MEAG Prime Reit, said it was undergoing strategic review that could see the Macquarie Group selling its stake in the Reit. It is said to have received more than 20 expressions of interest from unnamed parties.
In May, MEAG Munich Ergo AssetManagement sold its 25 per cent stake in the Reit’s manager to Singapore-based fund management company Pacific Star. The deal left Pacific Star and the Macquarie Group each with an equal share of the Reit manager. Macquarie’s 50 per cent stake has now been bought by YTL.
The YTL Group already controls Bursa Malaysia-listed Starhill Reit, the country’s largest Reit with four properties in Kuala Lumpur valued at about US$430 million. Mr Yeoh did not rule out any merger of the two Starhill Reits, saying that ‘as long as there is equitable interest for all, we will do it.’