A-REIT – SGX
17 January 2008, Singapore – Ascendas Real Estate Investment Trust (“A-REIT”) has renewed and signed new leases (including expansions) amounting to a total net lettable area of 46,933 sqm for the three months ended 31 December 2007 (the “Period”). These leases represent 6.8% of the net lettable area of its multi-tenanted buildings(1) and an annualised rental income of S$11.1 million for A-REIT.
The overall portfolio occupancy rate increased to a record high of 98.7% as at 31 December 2007 compared to 96.1% a year ago. Occupancy rate for A-REIT’s multi-tenanted buildings has also increased to 97.0% at the end of the Period versus 96.2% as at 30 September 2007. Total new leases (including expansions) for the Period were 16,961 sqm, of which 28.7% was in Business and Science Parks, and 32.8% was in Hi-Tech Industrial properties. The remaining 38.6% was in the other two sectors – Light Industrial & Flatted Factories and Logistics & Distribution Centres.
A-REIT’s portfolio comprises 51% multi-tenanted buildings and 49% sale-and-leaseback properties based on portfolio value.
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MMP – SGX
Corporate family rating of Baa1 remains unchanged
SINGAPORE, 16 January 2008 – Macquarie Pacific Star, Manager of MMP REIT – the S-REIT with the largest presence in Orchard Road – is pleased to announce that Moody’s Investors Service (Moody’s) has assigned a ‘Baa2’ rating to the S$2 billion multi-currency Medium Term Note (MTN) programme set up for MMP REIT on 8 January 2008. Moody’s corporate family rating of ‘Baa1’ with a stable outlook for MMP REIT remains unchanged. The corporate family rating was first assigned to MMP REIT in July 2006 and reaffirmed in May 2007.
Moody’s reiterated MMP REIT’s ‘Baa1’ corporate family rating reflects the high quality of its assets, strong rental reversions, almost full occupancy with staggered tenancies into 2010, and manageable tenant concentrations which provide stable recurring revenue streams.
Mr Franklin Heng, Chief Executive Officer of Macquarie Pacific Star, said: “Moody’s Baa2 rating for the MTN programme underscores our prudent debt management strategy, while its reaffirmation of the Baa1 corporate family rating for MMP REIT reiterates the quality of our assets. MMP REIT enjoys low gearing and a strong balance sheet. At 30 September 2007, gearing was 34.2 per cent, of which 88 per cent is fixed rate debt. The MTN programme will allow us to tap into other sources of funding, providing us with greater flexibility to manage our capital requirements, fund acquisitions and drive organic growth in our portfolio of assets.”
CRCT – BT
CapitaRetail China equity exercise completing soon
CAPITARETAIL China Trust (CRCT) is proceeding to complete a $280 million equity-raising exercise to fund the acquisition of Xizhimen Mall in Beijing by the end of this month.
CapitaRetail China Trust Management Ltd’s (CRCTML) CEO Lim Beng Chee, who said this at the trust’s fourth-quarter results briefing yesterday, also expressed confidence of getting legal title to Wangjing Mall – currently the trust’s main income generator – by May. CRCT currently does not have legal title to this property, also in Beijing. Instead, it has only contractual rights to the asset.
The trust posted distributable income of $8.6 million for the fourth quarter ended Dec 31, 2007, 9.1 per cent higher than the CRCTML’s forecast, despite net property income and gross revenue falling below forecast. CRCT’s Q4 distribution per unit of 1.80 cents reflects an annualised payout of 7.15 cents, translating to 3.78 per cent distribution yield based on CRCT’s closing price of $1.89 yesterday. The counter ended two cents lower yesterday. It reached an intra-day high of $3.34 in October last year.
Yields on real estate investment trusts like CRCT go up as their unit prices on the stock market fall, all other factors being equal.
Based on the trust’s current price, the upcoming $336 million acquisition of Xizhimen Mall will still provide yield accretion, going by the asset’s initial property yield of 5.7 per cent for the first year, Mr Lim added.
CRCTML obtained unitholders’ approval for the equity-raising exercise on Dec 4 but has yet to launch it because of weak equity market conditions. Assuming CapitaLand and CapitaMall Trust each subscribe for the new units to maintain their current 20 per cent stake each in CRCT, the amount to be raised from external parties would be $168 million, which Mr Lim described as a ‘very small equity raising’ for which he expects good response based on the keen interest among investors on the China growth story during CRCTML’s roadshow in November.
For Q4 ended Dec 31, CRCT posted net property income of $11.6 million, 13.6 per cent below the trust manager’s forecast in the trust’s listing prospectus dated Nov 29, 2006, on the back of gross revenue of $17.9 million, 11.2 per cent below forecast. This was due mainly to three of the trust’s seven established malls – Qibao Mall, Xinwu Mall and Jinyu Mall.
The shortfalls were temporary in nature – for instance, delays in the start of certain leases on the upper floors in the case of Qibao Mall. Management has taken a longer-than-expected time to sign new leases to achieve a more optimal tenancy mix and rental rate. Revenue is expected to improve within three to six months, CRCT said in its results statement.
Despite lower-than-expected revenue and net property income, CRCT’s Q4 distributable income still came in above forecast because of net interest saving, and over-provision of taxation in previous quarters.
For the year ended December 2007, CRCT posted distributable income of nearly $32 million, 9.5 per cent above forecast.
The trust’s asset size will increase to $1.2 billion after the Xizhimen acquisition and the trust manager is confident of achieving the $3 billion target size by end-2009, thanks to the strong acquisition pipeline put in place sponsor CapitaLand.
FSL – BT
First Ship Lease Trust’s US$12.1m Q4 distribution beats IPO forecast
FIRST Ship Lease Trust (FSLT) is to distribute US$12.1 million to unit-holders for the fourth quarter ended Dec 31, 2007, 13.6 per cent better than the projection made during its initial public offering (IPO) in March last year.
The Q4 distribution represents 100 per cent of the amount available for distribution. Distribution per unit (DPU) is 2.42 US cents compared with a forecast 2.13, and works out to 9.68 cents on an annualised basis. The Q4 DPU is also 8.5 per cent higher than that for the preceding quarter.
Based on Jan 15’s closing unit price of $1.20 and assuming a Singapore dollar/US dollar exchange rate of $1.431, this translates into a distribution yield of 11.5 per cent.
Revenue for the quarter came up to US$15.2 million, 31.4 per cent higher than the initial projection. The increase in DPU of 0.19 US cent over the preceding Q3 was made possible mainly by incremental cash flow resulting from the purchase and leaseback of two product tankers from Groda Shipping and Transportation in November.
‘We are very pleased with our achievements for the fourth quarter where revenue continued to grow compared to the preceding quarter and was significantly higher than what we projected at IPO,’ said Philip Clausius, chief executive of FSLT’s trust-manager FSL Trust Management.
FSLT had an initial portfolio of 13 vessels at listing. This has expanded to 18 vessels as at Dec 31, 2007, comprising four containerships, nine product tankers, three chemical tankers and two dry bulk carriers.
The trust aims to continue pursuing acquisition opportunities as part of its growth strategy but FSLT’s revenue base is still quite dependent on container ships and product tankers. It is, however, working to better diversify its portfolio, said chief financial officer Cheong Chee Tham.
It is on track to accomplish its IPO target of US$200 million asset acquisitions within 12 months of its listing date and has raised the target to US$300 million for financial year 2008. So far, US$158 million worth of vessels which are subject to long-term leases have been acquired.
FSLT’s books closure date is Jan 24 and payout will be made on Feb 22. The trust closed two cents lower at $1.18 yesterday.