Wednesday, January 26, 2011

Fortune Reit Q4 DPU up 10.7%

FORTUNE Real Estate Investment Trust (Fortune Reit) saw its fourth-quarter payout rise 10.7 per cent year-on-year, helped by higher occupancy and rental rates.

The Reit, which is listed both in Hong Kong and Singapore, reported yesterday, after the market closed, that distribution per unit (DPU) rose to 6.32 HK cents, from 5.71 HK cents. Distributable income for the October-December period climbed 11.3 per cent to HK$105.7 million (S$17.4 million) from HK$94.9 million a year earlier.

Total revenue for Q4 rose 9.1 per cent year-on-year to HK$217.7 million, while net property income climbed 10.7 per cent to HK$152.4 million.

Reit manager ARA Asset Management (Fortune) Ltd said yesterday that it will continue to drive revenue growth by embarking on asset enhancement initiatives.

And with leases that account for more than 30 per cent of its leased gross rentable area and gross rental income expiring this year, it will 'continue to implement effective leasing and tenant repositioning strategies'.

In particular, it will focus on Ma On Shan Plaza and The Metropolis Mall, where around 50 per cent of tenancies will be up for renewal this year.

'Leveraging on a strong balance sheet and capital structure, the manager will continue to look for acquisition opportunities in line with addressing the long-term interests of Fortune Reit's unit-holders,' it added.

Fortune Reit holds 14 retail properties in Hong Kong under its portfolio such as City One Shatin Property, Ma On Shan Plaza, Metro Town, The Metropolis Mall and Waldorf Garden Property. Together, the 14 properties provide two million sq ft of retail space and 1,660 car parking lots.

The occupancy rate of its properties climbed to a record high of 98.7 per cent at the end of last year, while passing rent also hit a record HK$28.7 per sq ft as at Dec 31.

For the year, distributable income jumped 20.3 per cent to HK$406.5 million. But DPU dropped to 24.35 HK cents from 30.20 HK cents in FY2009 because of an enlarged unit base as a result of a rights issue. Fortune makes distributions on a half-yearly basis. The full-year DPU, which comprises an interim DPU of 12.27 HK cents and a final DPU of 12.08 HK cents, works out to a yield of 6.1 per cent based on the unit's average closing price of HK$4.01 as at Dec 31, 2010.

Full-year total revenue increased 19.4 per cent to HK$837.3 million. Net asset value per unit at Dec 31, 2010, was HK$6.18, up from HK$5.32 a year earlier.

Fortune Reit units closed unchanged at HK$4.05 yesterday.

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