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Outperformance attributed to higher rental income from its two buildings

MACQUARIE MEAG Prime (MMP) Reit, which owns about 74 per cent of Wisma Atria and 27 per cent of Ngee Ann City, yesterday posted distributable income of nearly $14 million for the fourth quarter and $54.9 million for the year ended Dec 31.

Equivalent distributable income figures for comparable periods a year previously were not provided for the trust, which was listed in September 2005, but the trust’s manager did highlight that the Q4 and full-year distributable income figures were 11.5 per cent and 10.4 per cent respectively above projections disclosed in the initial public offer prospectus. The Q4 outperformance was attributed largely to higher rental income from its two buildings, especially for the office portfolios.

Nonetheless, some year-on-year comparisons can be gleaned at various levels from MMP Reit’s financial statements filed with the SGX yesterday. Fourth-quarter gross revenue was unchanged at $22.6 million. Net property income dipped one per cent to $17.2 million. Net income before tax fell 22 per cent to $10.9 million.

Full-year gross revenue of $89.9 million was 4 per cent higher than the proforma figure for the same year-ago period. Net property income rose 6 per cent over the same period to $69.3 million, while net income before tax increased 4 per cent to $46.4 million.

MMP Reit’s distribution per unit (DPU) for Q4 was 1.47 cents, 11.4 per cent higher than the IPO projection. The full-year payout is 5.79 cents, 10.3 per cent higher than projected and a 3.4 per cent improvement over 2005.

The full-year DPU reflects a distribution yield of 4.9 per cent based on MMP Reit’s $1.18 closing price on the stock market yesterday. Units in MMP Reit were issued at 98 cents apiece during the IPO.

‘Unitholders will enjoy the highest quarterly distribution to date, notwithstanding earlier concerns over the impact of the temporary closure of the Orchard MRT linkway to Wisma Atria,’ Macquarie Pacific Star Prime Reit Management’s CEO, Franklin Heng, said yesterday.

After the temporary closure of the Orchard MRT linkway on Sept 30, shopper traffic at Wisma Atria was 47 per cent lower in October. However, it quickly recovered in November with an 84 per cent increase in December over November, after new escalators were installed ahead of schedule in early December, Macquarie Pacific Star said yesterday.

Net asset value per unit stood at $1.16 as at Dec 31, up 18.4 per cent from 98 cents as at Sept 30. The valuation of MMP Reit’s two properties rose by 12.9 per cent from about $1.3 billion in December 2005 to $1.5 billion as at Dec 31, 2006, resulting in a revaluation surplus of $171 million.

Source : Business Times - 24 Jan 2007

If Owning a slice of medical property is the way to healthy returns, investors can take a number at First Real Estate Investment Trust (Reit).

The Reit announced yesterday a deal to buy three local health-care properties - two nursing homes and a hospital - from Pacific Healthcare Holdings for $38.2 million.

The hospital, a freehold property with 49 beds in Adam Road, is valued at nearly $15 million. The nursing homes are at Lengkok Bahru in Bukit Merah and Senja Road in Bukit Panjang.

This is First Reit’s maiden acquisition since it listed on the Singapore Exchange mainboard last month.

Its original portfolio consists of four properties in Indonesia operated by Siloam International Hospitals.

Pacific Healthcare, which is also listed on the mainboard, runs medical facilities across the region, including Singapore, India and Hong Kong.

‘With rising demand for quality health care, we believe there will be further growth in facilities for acquisition,’ said Dr Ronnie Tan, chief executive of First Reit’s manager, Bowsprit Capital.

‘We continue to pursue opportunities in health care and health-related assets in Asia that will provide DPU (distribution per unit) growth and enhance the value of our portfolio.’

The deal was announced during a trading halt of both firms’ shares yesterday afternoon.

Before the halt, First Reit shares had surged about 6 per cent to 82.5 cents yesterday from last Friday’s close of 77.5 cents.

Under the sale-and-leaseback deal, the three properties will be leased back to the sellers for 10 years, with an option for renewal.

The three assets will bring in about $2.98 million in combined annual rental income, with yearly step-up increases.

The purchase of the nursing homes is expected to be completed in three months. The hospital transaction could take up to six months.

The assets will be accretive to First Reit’s DPU and the incremental annualised DPU is 0.193 cent, which translates to 3.03 per cent DPU growth.

After the trading halt was lifted at 4.45pm, First Reit shares ended the day at 79 cents.

Source : Straits Times - 23 Jan 2007

K-REIT Asia, the real estate investment trust vehicle of Keppel Land, has reported a distributable income of $11.2 million for the period from April 26 to Dec 31, 2006. This exceeds its forecast by 23.9 per cent.

The income relates to this period as K-Reit was established on Nov 28, 2005, but acquisition of its properties was completed on April 26.

The Reit manager, K-Reit Asia Management, also reported that net property income for the period of $16.8 million exceeds its forecast by 11.3 per cent.

For the period from July 1 to Dec 31, 2006, K-Reit Asia will pay out 3.47 cents per unit on Feb 28. This is in addition to the 1.16 cents per unit already paid on Aug 28 last year for the period April 26 to June 30.

The total distribution payout for the period from April 26 to Dec 31, 2006 amounts to 4.63 cents, which works out to an annualised distribution per unit (DPU) of 6.76 cents. This is 24.5 per cent above forecast DPU of 5.43 cents for 2006.

The Reit manager attributed the improvement to higher rentals and full occupancies, in particular its properties Keppel Towers and Prudential Tower. Other properties that form K-Reit’s $677 million portfolio include GE Tower and Bugis Junction Towers.

For Prudential Tower, net property income for the period was $3.17 million, 61.2 per cent higher than the same period a year earlier, calculated on a pro forma basis. Net property income for Keppel Towers and GE Tower combined was $7.82 million, 44.8 per cent higher year-on-year, while for Bugis Junction Towers, net property income was $5.82 million, 47 per cent higher year-on-year, both also on a pro forma basis.

The Reit manager said it is confident that K-Reit will deliver a forecast DPU consistent with that achieved in the current period.

K-Reit ended yesterday at $2.62 per unit, up 3 cents.

Source : Business Times - 23 Jan 2007

MAPLETREE Logistics Trust (MLT) said that it received good support for its fund-raising exercise over the past two days.

The real estate investment trust (Reit) had offered 296.8 million new units to raise a total of $349 million.

The proceeds will be used to fund the acquisition of 15 properties, refinance the acquisition of another five properties and also meet other refinancing requirements, MLT said.

On Thursday, the private placement of 271.8 million units at $1.18 each was about 12.5 times subscribed - excluding the 89.5 million units taken up by sponsor Mapletree Investments, the Reit said.

The institutional demand was well-diversified, with investors from Asia, Europe, Australia, the United States and the Middle East, MLT added.

And the 25 million units offered to the public at $1.13 a unit via an ATM offering were snapped up within two minutes after the offer opened at 10 am yesterday.

The ATM offer price of $1.13 per unit represents a discount of 4.2 per cent from the private placement issue price of $1.18 and a 5.8 per cent discount to MLT’s closing price of $1.20 on Wednesday.

‘We are particularly gratified by the strong positive response this equity fund raising has received from both institutional and individual investors, which we believe is a vote of confidence in the future growth of MLT,’ said Chua Tiow Chye, chief executive of the Reit’s management team.

‘The successful completion of this fund-raising exercise positions us well to execute our regional mandate in the growing Asian logistics industry.’

The new units will start trading on Jan 25 at 2 pm. MLT closed five cents up at $1.25 yesterday.

Source : Business Times - 20 Jan 2007

MAPLETREE Logistics Trust yesterday reported a 97 per cent rise in distributable income to $11.8 million for the fourth quarter of last year.

This was largely due to an extra 23 properties it bought over the past year.

Its available distribution per unit for the fourth quarter was 1.45 cents - 38 per cent higher than last year.

This takes last year’s total payout to 5.07 cents per unit, exceeding its forecast by 10.7 per cent.

The trust will distribute 1.75 cents to 1.85 cents per unit on Feb 28 for the period from Oct 1 last year to Jan 24.

At the end of last year, its portfolio comprised 41 properties worth $1.43 billion, with another $221.3 million worth of acquisitions announced.

Mr Chua Tiow Chye, chief executive of Mapletree Logistics Trust Management, said the trust’s performance would have allowed its investors to enjoy a one-year total return of about 30 per cent, including capital gains.

Meanwhile, Ascendas Real Estate Investment Trust (A-Reit) yesterday announced its third-quarter distributable income - which rose 6.8 per cent to $41 million.

Third-quarter distribution per unit - which will be paid out on Feb 28 - was 3.2 cents, up from 3.01 cents in the same period a year earlier.

This represents an annualised yield of 4.8 per cent based on the Dec 29 closing price of $2.67 per unit.

Mr Tan Ser Ping, the chief executive of A-Reit’s manager, said the result was due to a larger portfolio and positive rental reversions, especially from suburban properties in the existing portfolio.

A-Reit had a portfolio of 68 properties worth $3 billion as at Dec 31. In its financial year so far, it has announced about $425 million worth of acquisitions and developments.

Source : Straits Times - 17 Jan 2007