Fortune Reit distributable income up 68%
Jump due largely to contribution from 6 new malls it bought last year
FORTUNE Real Estate Investment Trust has reported a 68.3 per cent rise in distributable income for the second quarter of the year, thanks to contributions from six new shopping malls it bought earlier.
Click here for Fortune Reit’s financial statements
The trust, controlled by Hong Kong businessman Li Ka-shing’s Cheung Kong Holdings, said income available for distribution for the three months ended June 30 went up to HK$68.66 million (S$14 million), or 8.53 HK cents a unit, from HK$40.8 million, or 8.25 HK cents, a year ago.
Net property income almost doubled to HK$109.46 million from HK$55.51 million, mainly on contributions from six properties the trust bought on June 28, 2005. Its first five malls also reported better rental rates.
For the first half of the year, Fortune Reit will distribute 71.5 per cent more in income to unitholders, or HK$141.14 million compared to the first half of last year. That works out to 17.3 HK cents a unit, up from 16.96 HK cents.
The trust expects the rest of the year, 2007 and 2008 to be good years for unitholders because of higher rentals and Hong Kong’s booming economy.
‘Hong Kong’s economy continues to improve, with unemployment rate reaching a 57-month low of 4.9 per cent in May 2006,’ the trust said yesterday. ‘In addition, retail sales saw an increase of 6.6 per cent in the first five months of 2006 over the same period a year ago.’
At the end of June, the trust’s 11 malls have a committed occupancy rate of 95.1 per cent, with the average rental remaining at HK$23.41 per square foot per month.
The trust will also look at increasing rental rates by renovating parts of the malls and adding more retail space.
‘We will continue to source not just from our parent company, but also from third-party sources for retail properties that fit our portfolio,’ said executive director of ARA Asset Management, which runs Fortune REIT.
John Lim, chief executive of ARA, said the trust is looking at adding assets to the portfolio, and does not rule out properties in mainland China. But he added that it is still ‘early days’.
‘There is no reason for us not to look at China but we are treading very cautiously,’ Mr Lim said. ‘I’m not saying I’m going to go out and buy now. We have to take the sensible approach.’
The dividends will be paid out on Aug 28.
Fortune is 27 per cent-owned by Cheung Kong Holdings and 7.4 per cent by Cheung Kong associate Hutchison Whampoa.
Source : Business Times - 26 Jul 2006
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