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Malaysia’s infrastructure developer YTL Corp is buying a 26 per cent stake in Singapore’s Macquarie Prime REIT (MP REIT).

It will also buy a 50 per cent stake in Prime REIT Management Holdings from Macquarie Bank.

Prime REIT Management is the manager of Macquarie Prime REIT.

The deals are worth a total of S$285 million.

Under the agreement, YTL will buy over 247 million units of MP REIT at 82 cents each.

That is at a 52 per cent premium over the last traded price.

YTL plans to take control of the REIT and rebrand it into Starhill Global REIT, once the deal is completed. - CNA/ms

Source : Channel NewsAsia - 28 Oct 2008

Strong performance by Causeway Point and Anchorpoint

FRASERS Centrepoint Trust (FCT) has announced distribution per unit (DPU) of 2.05 cents for its fourth quarter ended Sept 30, a 23 per cent increase from Q4 last year, manager Frasers Centrepoint Asset Management (FCAM) said yesterday.

Full-year 2008 DPU rose 11 per cent to 7.29 cents.

FCAM chief executive Christopher Tang said Q4 capped a successful year for FCT - ‘another consecutive year of sustained growth’.

A strong performance by Causeway Point and the reinvigorated Anchorpoint continued to drive gross revenue and net property income growth, according to FCT.

Q4 gross revenue grew 11 per cent to $22.1 million, while net property income increased 10 per cent to $14.1 million. FY2008 gross revenue and net property income were both up 9 per cent to $84.7 million and $56.6 million respectively.

Q4 leases at Causeway Point were renewed at 15 per cent above preceding rates, reflecting strong demand and tight supply situation in the suburban retail sector.

Anchorpoint’s Q4 2008 gross revenue more than tripled to $2.4 million from the year earlier. Rents increased more than 40 per cent as the mall reverted to full occupancy after the completion of enhancement work.

Overall portfolio occupancy declined to 87.7 per cent at Sept 30 from 94.6 per cent a year earlier, as a result of planned vacancies associated with enhancement work at Northpoint.

FCT said it has a conservative gearing level of 28.1 per cent and faces no refinancing pressure, It has no material refinancing and interest rate risks as its term loan amounting to $260 million only expires in July 2011, and its associated interest rate is fully hedged.

Asset enhancement works at Northpoint are on schedule for completion by June next year, the trust said. Rents at Northpoint are projected to increase 20 per cent to $13.20 per sq ft per month, translating to a 30 per cent increase in net property income to $18 million.

With close to 90 per cent of its post-enhancement net lettable area already committed, Northpoint is set to provide a substantial boost to FCT’s income from the second half of FY2009 onwards.

Source : Business Times - 24 Oct 2008

Results boosted by higher gross rental income and income from 1George St

CAPITACOMMERCIAL Trust (CCT) has reported distributable income of $43.2 million for the third quarter ended Sept 30, up 46.1 per cent from $29.6 million a year earlier and 3.8 per cent above the Reit manager’s forecast.

The strong result was attributed to higher gross rental income from CCT’s portfolio and income from 1 George Street from July 11. Q3 net income from 1 George Street was $11.09 million.

The trust’s distribution per unit (DPU) of 3.1 cents for Q3 is 44.9 per cent more than in Q3 2007 and 4 per cent above forecast.

Its gearing ratio rose to 36.3 per cent in Q3, from 29.1 per cent previously. Total debt increased to $2.54 billion, from $1.83 billion.

Lynette Leong, CEO of the Reit manager, said: ‘We have always employed a pro-active approach in the execution of our capital and risk management strategies. CCT’s current gearing is at a prudent level of 36.3 per cent and the interest cost for 2008 is 100 per cent fixed.’

The trust’s interest service coverage ratio at end September was 3.1 times and its average cost of debt was 3.6 per cent.

Ms Leong said that for $580 million of debt maturing next year, CCT is evaluating refinancing proposals received from banks and the cost is expected to be competitive. ‘We intend to finalise the refinancing well in advance of the debt maturity,’ she said.

Property operating expenses of $25.8 million rose $8.4 million or 48 per cent in Q3 due to the acquisition of 1 George Street, as well as higher property tax, utility costs and maintenance costs for other properties.

The trust’s expenses of $2.4 million rose $1.1 million or 83.7 per cent, due to higher professional fees and unit-holders’ expenses.

Borrowing costs of $25.5 million rose $12.8 million or 101.5 per cent, due mainly to an increase in borrowing from the issue of $335 million of fixed-rate notes, a $650 million term loan and $370 million of convertible bonds and amortisation cost on upfront fees and expenses incurred on the convertible bonds.

CCT said its office properties are likely to perform well for the rest of the year as it expects positive rental reversions for leases expiring in the current Q4.

‘This is because the average passing rent for CCT’s office portfolio is only $7.20 psf per month and is significantly below market,’ it said.

CCT also expects rental declines to be mitigated by low new office supply for the rest of 2008 and in 2009.

Q3 earnings per unit on a fully diluted basis were 1.51 cents, down from 1.69 cents a year ago.

CCT’s unit price closed unchanged at $1.02 yesterday.

Source : Business Times - 24 Oct 2008

UNITHOLDERS in CapitalCommercial Trust (CCT), which owns extensive office space here, got a bumper return in the third quarter - beating a forecast - mainly due to higher gross rental income.

Another factor: The real estate investment trust (Reit) started to register income from 1 George Street, an office property near Raffles Place, from July 11. That was when CCT completed its $1.165 billion purchase of the 23-storey Grade A office building from CapitaLand.

CCT reported a 46 per cent jump in distributable income to $43.2 million for the quarter ended Sept 30.

Distribution per unit was 3.1 cents, up 44.9 per cent from last year - and 4 per cent above the manager’s forecast issued in June last year. Net property income rose 54.4 per cent to $66.7 million.

Singapore’s office market has been affected by the prolonged global financial and economic crisis in the United States and Europe, inflation and a deteriorating world economy.

However, CCT expects its properties to continue to perform well for the rest of the year. Its portfolio includes 6 Battery Road, Capital Tower and Bugis Village.

‘The average rent for our office properties is at present $7.20 per sq ft per month, significantly below current market levels,’ said Mr Richard Hale, chairman of CCT’s manager.

Prime office rents here stayed at $16.10 per sq ft a month in the third quarter, data from CB Richard Ellis showed.

Still, in view of more challenging times ahead, the commercial Reit has stepped up its lease management and tenant retention efforts.

CCT’s top 10 tenants include major financial institutions such as Standard Chartered Bank and JPMorgan Chase. But about 64 per cent of its gross rental income comes from tenants in the non-banking/insurance and non-financial sectors, it said.

The Reit’s gearing is at 36.3 per cent, up from 29.1 per cent as at June 30. There is zero interest rate exposure this year as its interest cost is 100 per cent fixed.

It aims to keep at least 80 per cent of its interest cost fixed. Next year, it expects to see this rise from 66 per cent to 89 per cent when interest for a $650 million term loan is reset in January.

Source : Straits Times - 24 Oct 2008

CapitaCommercial Trust (CCT) achieved a distributable income of S$43.2m for the third quarter ended September 30. This was 46.1 per cent higher compared to the same period last year.

The increase was attributed mainly to the higher gross rental income achieved for its portfolio as well as income contribution from its No.1, George Street property.

The trust’s third quarter distribution per unit (DPU) also saw an increase of 44.9 per cent to 3.1 cents compared to the same period last year.

This was 4 per cent above an earlier forecast by trust manager CapitaCommercial Trust Management.

CCT’s DPU for the first nine months of the year was 8.29 cents.

Based on the closing price of S$1.02 per unit on October 22, the distribution yield was 10.9 per cent.

Source : Channel NewsAsia - 23 Oct 2008