FirstREIT – SGX
First REIT’s 3Q07 distributable income exceeds forecast by 7.5% to S$4.68 million
Revenue exceeds forecast by 15.3% to $7.02 million with contributions from four new acquisitions
DPU of 1.72 Singapore cents is 7.5% above forecast; translates to annualised distribution yield of 8.65%
Portfolio expansion continues with China MOUs
SINGAPORE – 22 October 2007 – Bowsprit Capital Corporation (the “Manager”), the manager of First Real Estate Investment Trust (“First REIT”), Singapore‟s first healthcare real estate investment trust, today announced distributable income of S$4.68 million for First REIT‟s third quarter FY2007 ending 30 September 2007. This exceeded forecast by 7.5%.
Distribution Per Unit (“DPU”) for the third quarter was 1.72 Singapore cents or 7.5% higher than forecast. This translates to an annualised DPU of 6.70 Singapore cents, representing a distribution yield of 8.65%, using the closing price of S$0.775 per unit on 19 October 2007.
Actual revenue was booked at S$7.02 million, exceeding the forecast by 15.3% from a base of S$6.09 million. Net Property Income (NPI) grew 15.6% from a forecast of S$6.06 million to an actual NPI of $7.0 million.
The Books Closure and Distribution Payment dates are 1 November 2007 and 29 November 2007 respectively.
Revenue growth in the third quarter was driven by contributions in rental income from First REIT‟s newly acquired properties – Pacific Healthcare Nursing Homes at Bukit Merah and Senja in April 2007, The Lentor Residence in June 2007 and the Adam Road Hospital in July 2007.
With the addition of four healthcare facilities in Singapore, First REIT‟s total group assets amounted to S$328 million while Net Asset Value (NAV) per unit was 0.88 Singapore cents, as of 30 September 2007.
Dr Ronnie Tan, Bowsprit‟s CEO noted, “The regional macroeconomic environment, including Indonesia and Singapore where we have the bulk of our properties, remains positive for 2007. As such, we are confident of exceeding our forecast DPU of 6.51 Singapore cents for the full year.”
Potential Acquisitions
Providing an update on First REIT‟s acquisition targets, Dr Tan added, “Leveraging on the buoyant regional healthcare markets, coupled with our strong acquisition pipeline, we are confident of raising our asset portfolio to S$500 million before end of 2009.”
“In fact, one of our strengths lies in our low gearing at approximately 16.5% giving us more options to fund prospective acquisitions. We have recently ventured into China, establishing agreements with hospitals located in Wuxi, Shanghai and Jiangsu province to explore potential acquisitions”
First REIT signed a Memorandum of Understanding (MOU) with Nantong Rich Hospital Co. Ltd. (“Nantong”) in August 2007 to invest in the property assets of a 500-bed hospital in Jiangsu province via a subscription of Redeemable Convertible Cumulative Preference Shares (RCCPS).
In September 2007, First REIT entered into a conditional agreement to invest in the property assets of the 200-bed Shanghai Woman and Child Healthcare Hospital and the proposed Hengshan Urology Hospital, both located in Shanghai.
Most recently, in October 2007, First REIT signed a MOU to acquire the 90-bed Wuxi New District Phoenix Hospital.
Besides acquiring assets from other vendors in the region, First REIT continues to explore potential acquisitions with its Sponsor, Lippo Karawaci in Indonesia.
Source : SGX
AREIT – UOBKH
Growing through acquisitions and office spillover
• In line with expectations. DPU grew 11% yoy to 3.5cts in 2QFY08, driven by higher rental income from completed acquisitions, improved overall occupancy and rental reversions. The YTD distribution payout represents 49% of our forecast of 14.2 cts, and 51% of consensus’ forecast of 13.6 cts for the full year.
• Business and Science Park segment boosts portfolio occupancy. Contribution from new acquisitions, increased occupancy rates and rents drove up 2Q08 gross revenue 14.8% yoy to S$80.2m. Overall portfolio occupancy moved 1.1%-pt to 98.3% in the period, primarily driven by occupancy levels in the Business and Science Park segment. This surged 9.8%-pt to 97.2% in 2Q08, up from 87.4% in 1Q08. Strong spillover demand from office users saw 2Q08 rents for the same segment rise 33% qoq to an average of S$40 psm per month, up from S$30 psm per month in 1Q08. With the office supply crunch unlikely to be significantly alleviated in the next two years, the Business and Science Park segment is likely to still lead strong rental reversions going forward.
• Expanding through development projects. A-Reit announced two development projects amounting to a total development cost of S$277 mil at Changi Business Park (CBP) and Pioneer Walk. The development at CBP comprises three business park buildings with a combined gross floor area (GFA) of 74,660 sqm – two built-tosuit (BTS) facilities and a multi-tenanted block with an amenity podium. The development project would be completed in phases through CY09 and CY10. The second development at Pioneer Walk comprises two blocks of ramp-up industrial facilities with a combined lettable area of 80,609 sqm. About 35% of the development has been pre-committed. Completion is expected by 2H08.
• Maintain Outperform. Our DPU forecasts and DDM-derived target price of S$2.90 remain unchanged, based on a cost of equity of 6.2%. For FY08 ytd, A-Reit has announced a total of S$359m of acquisitions and development projects while another S$61m worth of development projects await completion. We believe that AReit remains on target to achieve an asset size of S$5bn by CY10 via its development projects and a S$500m acquisition pipeline from sponsor Ascendas Land. The recent share price weakness and forward yields of up to 6.1% makes AReit
an attractive buy now.
LMIR – BT
Lippo to raise up to $587m with retail Reit
INDONESIA’S Lippo Group will be raising up to $587.4 million with the planned Singapore listing of a real estate investment trust (Reit) based on its retail properties in Indonesia.
The Lippo-Mapletree Indonesia Retail Trust (LMIR) will offer 645.5 million units at 78 to 91 cents a unit, according to the trust’s preliminary prospectus which was lodged with the Monetary Authority of Singapore yesterday.
Separate from the offering, Lippo will subscribe for 287.7 million units in the trust while Singapore’s Mapletree Investments will subscribe for 127.3 million units. This means that Lippo and Mapletree will hold stakes of at least 27.1 per cent and 12 per cent in the trust once it is listed.
Of the 645.5 million units that will be part of the share offering, 625.5 million units will be placed out to institutional and other investors, while 20 million units will be offered to the public.
The trust will be the first Reit in Singapore to provide exposure to Indonesia’s growing retail sector.
Two other SGX-listed Reits have significant exposure to overseas retail markets – CapitaRetail China Trust, which owns retail properties in China, and Fortune Real Estate Investment Trust, which holds retail properties in Hong Kong.
LMIR’s initial property portfolio will comprise seven retail mall properties and seven retail spaces located within other retail malls, all of which are located in Indonesia.
Reference : Prelim Prospectus
AREIT – BT
A-Reit’s Q2 income for distribution up 15% at $46.4m
ASCENDAS Real Estate Investment Trust (A-Reit) said yesterday its second-quarter distributable income rose 15 per cent to $46.4 million, from $40.5 million a year earlier, as demand for the trust’s business space grew.
The better performance lifted A-Reit’s distribution per unit (DPU) to 3.51 cents, up 11 per cent from 3.16 cents paid for the previous corresponding period.
Net property income for Q2 ended Sept 30, 2007 increased 16 per cent to $60.1 million, from $51.9 million a year earlier.
A-Reit said its better performance was due to higher revenue resulting from higher occupancy and rents.
The occupancy rate for A-Reit’s portfolio reached 98.3 per cent in Q2. And rents at business and science parks and hi-tech industrial properties rose 32 per cent and 15 per cent respectively from Q1.
‘This can be attributed to the spillover effect from the tight CBD office market and our active asset management initiatives,’ said Tan Ser Ping, chief executive of the Reit’s manager.
For the half-year ended Sept 30, A-Reit’s distributable income rose 14 per cent to $91.1 million, while DPU rose 10 per cent to 6.88 cents.
Going forward, A-Reit said that with the economy strong, demand for business and industrial space, especially at business and science parks and hi-tech industrial properties, is likely to remain healthy.
The trust said: ‘A-Reit expects to be able to deliver a return for the second half of the current financial year that is in line with its performance in the first half of the financial year.’
A-Reit’s shares closed three cents lower at $2.39 yesterday. The stock price has fallen 10.5 per cent since the start of the year, compared with a 25.5 per cent climb in the Straits Times Index.
CMT – BT
CMT’s Q3 net income up 29.1% to $53.2m
The Reit’s Q3 showing is 17.2% above the trust manager’s forecast
SINGAPORE’S biggest real estate investment trust, CapitaMall Trust (CMT), reported third-quarter group distributable income of $53.2 million, 17.2 per cent above the trust manager’s forecast and 29.1 per cent higher than in the year-ago period.
The shopping centre Reit yesterday also revealed plans to develop a low office tower with about 95,000 sq ft gross floor area (GFA) above the retail space at Tampines Mall. The time frame has yet to be finalised, but work could begin as early as sometime next year. CMT obtained outline planning advice from Urban Redevelopment Authority in July for a plot ratio increase for an office development and the trust has proceeded to apply for provisional permission to fully use the additional plot ratio increase from 3.5 to 4.2 for an office development.
For Funan DigitaLife Mall, CMT is currently exploring various options to unlock the value of this asset, after receiving provisional permission earlier this year, to build a nine-storey commercial block (predominantly offices) to maximise unutilised GFA of about 386,000 sq ft.
Asset enhancement works at Bugis Junction will see balconies being added on level 2 along Hylam and Malay streets, while opaque shopfronts on level 3 will be converted to glass parapets. Sembawang Shopping Centre’s redevelopment is on track for completion in Q4 2008.
CMT is already one of Singapore’s biggest owners of malls with $5.8 billion worth under its belt, but CapitaMall Trust Management Ltd’s CEO Pua Seck Guan says he is confident of growing this to $8 billion by 2010.
This will come from acquisition of malls from parent CapitaLand’s portfolio (such as Clarke Quay and a half-stake in Ion Orchard), as well as from other parties because of ‘CMT’s competitive cost of capital, superior skill set to extract value and established platform that allows us to optimise rentals,’ Mr Pua says.
Group gross revenue for the third quarter ended Sept 30, 2007, was $114.5 million, which was 20.7 per cent or $19.6 million higher than CMTML’s forecast based on an offer information statement dated August last year.
Roughly three quarters of this outperformance was due to consolidation of three malls owned by CapitaRetail Singapore Ltd from June 1 this year, while the rest was due to top-line revenue growth at the other malls in the CMT portfolio.
CMT’s Q3 group gross revenue was also 39.5 per cent higher than that in the year-ago period and the increase was due to a full quarter’s contribution from the trust’s 40-per-cent stake in Raffles City this round, compared with just a month’s contribution in Q3 2006; the consolidation of the three malls under CRS since June 1 this year; as well as revenue increase in other malls largely because of new and renewed leases at higher rates, plus the completion of asset enhancement at IMM Building late last year.
Group net property income for Q3 2007 was $76.8 million, 21.7 per cent higher than the forecast and 44.5 per cent above that in the same year-ago period.
CMT unitholders will receive a distribution per unit (DPU) of 3.40 cents for Q3, inclusive of a 0.09 cent capital distribution from the trust’s investment in CRCT. The 3.40-cent payout works out to 13.49 cents on an annualised basis, or a distribution yield of 3.69 per cent based on CMT’s closing price yesterday of $3.66.