REAL estate investment trusts (Reits) are becoming increasingly ubiquitous in Singapore, thanks to their popularity. But more could be done to improve their environmental impact, given their growing significance in the property scene.
Dr Joseph Chun of law firm Shook Lin & Bok has noted - in a recent study he undertook while he was then employed by the NUS’s Department of Real Estate - that the legal framework in which Reits operate has the likely effect of undermining the Singapore government’s efforts to encourage green property development and management.
And he has suggested that there may be a need to consider measures to counteract these presumably unintended adverse environmental effects.
‘Real estate is one of the most significant asset classes in Singapore … However, the land is more than an investment asset to be managed for maximum income; it is also our abode in which we live, work, and play. Investment decisions that enhance or degrade this abode have serious impacts on our lives that go beyond financial returns,’ Dr Chun said, in his article Are Reits Built to be Green?.
He suggests that more needs to be done to encourage environmentally friendly practices within the property sector in general, and the Reits sector in particular.
The popularity of Reits as an investment tool in Singapore has encouraged the growth and creation of such trusts. The number has grown from just one - CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.
There have been estimates that Reits could eventually constitute up to 70 per cent of the listed real estate in Singapore - in line with international trends.
‘As Reits increase their dominance of the urban environment, the need to avoid or at least mitigate those aspects of Reit law that encourage unsustainable behaviour will correspondingly become more urgent,’ Dr Chun proposed in his article.
He believes the nature of Reits as an investment tool and the legal framework governing them significantly restrict the scope of any green agenda.
He observed that Reits are designed to appeal to investors looking for short-term, steady cash returns - with little to motivate the Reit manager to invest in measures that benefit the public or the occupants of the Reit’s properties, ie. green measures, if these do not increase the Reit’s income.
‘As long as tenants who pay the utility charges are not willing to pay a premium for energy efficiency or healthier indoor environment, investing in green refurbishments that do not provide significant quantifiable financial returns is simply not an attractive use of limited funds,’ he noted.
The short-term orientation is further encouraged via the reporting requirements placed on Reits - with managers having to report the trust’s financial performance every quarter, value each property of the trust at least once a year and report the annual value in the annual report. These act as a barrier towards a life cycle approach to investing in environmental performance.
There are also funding constraints to pursuing a green agenda, with Reits having to distribute most of their taxable income to unit holders in order to maintain their tax transparent status.
‘The legal limit on the amount of its funds a Reit can invest in property development coupled with the relatively risky nature of property development also doesn’t help the green cause as it means that a Reit is more likely to seek out existing buildings to acquire rather than opportunities to develop new properties,’ Dr Chun said.
Typically, it is easier and less costly for developers to incorporate environmentally friendly features into new buildings than it is to improve the energy efficiency of existing buildings.
A cue could be taken from the US, where several states offer tax credits for buildings that meet certain green standards.
Dr Chun believes the law can be amended to encourage the development of more environmentally friendly buildings. He suggests relaxing the legal requirements on the minimum distribution of dividends and limits on borrowings in respect of retained earnings or borrowings invested in refurbishment, retrofitting and renovation activities that lead to a property achieving a green rating.
He also believes that measures could be put in place to mandate annual assessments of the environmental performance of the properties owned by Reits, alongside the current annual valuations needed of the properties owned by Reits. ‘(This will) help ethical investors make informed decisions about the green value of a Reit, thereby giving the Reit looking to attract the ethical investors’ dollar a motivation to upgrade its environmental performance,’ he said.
Dr Chun concludes, in his piece: ‘Sustainable development requires us to integrate the environmental considerations into all our development decisions, including our investment decisions, so it is unsatisfactory when the law encourages investment in real estate that has the potential to cause environmental harm without simultaneously providing for compensating measures to avoid or mitigate the harm.’
Source : Business Times - 10 Dec 2007
Showing posts with label REIT. Show all posts
Showing posts with label REIT. Show all posts
Wednesday, December 12, 2007
Saturday, December 1, 2007
MACARTHURCOOK Industrial Reit (MI-Reit)
MACARTHURCOOK Industrial Reit (MI-Reit) has signed an agreement to acquire an office and warehouse facility in the Tai Seng industrial precinct for $25 million.
Under the agreement, Powermatic Data Systems, which is listed on the Singapore Exchange, will lease back the property at 135 Joo Seng Road for five years with the option to extend for another five years. The lease will commence upon the completion of the acquisition, which is scheduled for February 2008.
The property was transacted at the initial yield of 7.3 per cent, and will be accretive to MI-Reit’s distribution per unit following completion, said MacarthurCook Investment Managers (Asia) Ltd (MCKIM), the manager of the Reit.
Chris Calvert, CEO of MCKIM, said: ‘We are pleased with the acquisition of 135 Joo Seng Road. The inclusion of SGX-listed Powermatic as one of our tenants further enhances our portfolio, of which approximately 70 per cent is comprised of SGX-ST listed companies or their subsidiaries.
‘This acquisition provides unitholders with the twin benefits of medium to long-term income stability and also the opportunity for capital and rental value growth, which will form the steadily increasing demand for quality office accommodation in the Tai Seng industrial precinct.’
The inclusion of the property in MI-Reit’s portfolio will further contribute to income stability through enhanced tenancy and property diversification, and reduced exposure to its largest tenant, UE Tech Park Pte Ltd, from 31.6 per cent to 29.4 per cent of portfolio income, MCKIM said.
With the latest acquisition, MI-Reit will have total investments of approximately $642.6 million in 22 properties.
It intends to finance the acquisition wholly with debt but may consider alternative means of funding as appropriate. Assuming 100 per cent debt financing, the acquisition will increase MI-Reit’s committed gearing level from 36.7 per cent to 39.5 per cent.
Source : Business Times - 30 Nov 2007
Under the agreement, Powermatic Data Systems, which is listed on the Singapore Exchange, will lease back the property at 135 Joo Seng Road for five years with the option to extend for another five years. The lease will commence upon the completion of the acquisition, which is scheduled for February 2008.
The property was transacted at the initial yield of 7.3 per cent, and will be accretive to MI-Reit’s distribution per unit following completion, said MacarthurCook Investment Managers (Asia) Ltd (MCKIM), the manager of the Reit.
Chris Calvert, CEO of MCKIM, said: ‘We are pleased with the acquisition of 135 Joo Seng Road. The inclusion of SGX-listed Powermatic as one of our tenants further enhances our portfolio, of which approximately 70 per cent is comprised of SGX-ST listed companies or their subsidiaries.
‘This acquisition provides unitholders with the twin benefits of medium to long-term income stability and also the opportunity for capital and rental value growth, which will form the steadily increasing demand for quality office accommodation in the Tai Seng industrial precinct.’
The inclusion of the property in MI-Reit’s portfolio will further contribute to income stability through enhanced tenancy and property diversification, and reduced exposure to its largest tenant, UE Tech Park Pte Ltd, from 31.6 per cent to 29.4 per cent of portfolio income, MCKIM said.
With the latest acquisition, MI-Reit will have total investments of approximately $642.6 million in 22 properties.
It intends to finance the acquisition wholly with debt but may consider alternative means of funding as appropriate. Assuming 100 per cent debt financing, the acquisition will increase MI-Reit’s committed gearing level from 36.7 per cent to 39.5 per cent.
Source : Business Times - 30 Nov 2007
Asia Real Estate Prime Development Fund and aims to make $400US million ($578S.2 million)
SINGAPORE-BASED investment firm Pacific Star has shrugged off concerns about global share markets to launch a fund that banks on Asia’s property prospects.
The company has set up the Asia Real Estate Prime Development Fund and aims to make $400US million ($578S.2 million) worth of real estate investments.
The fund will invest in prime residential apartments, serviced residences and mixed development projects in Singapore, China, Hong Kong, Malaysia, Thailand, South Korea and Japan.
Its first deal is under way - the purchase of a 49 per cent stake in two Bangkok freehold residential projects. The developer is Asian Property Development, one of Thailand’s largest listed residential property developers.
Both projects will target local buyers in the upper-middle-income group.
Pacific Star, although one of the newer property fund houses in Asia, is growing fast. It has launched three other funds, including the $580US million Eureka Office Fund, which owns commercial properties such as Temasek Tower, One George Street and The Adelphi.
It was also behind the Macquarie Meag Prime Real Estate Investment Trust, which is listed in Singapore and owns stakes in shopping malls Wisma Atria and Ngee Ann City.
Source : Straits Times - 30 Nov 2007
The company has set up the Asia Real Estate Prime Development Fund and aims to make $400US million ($578S.2 million) worth of real estate investments.
The fund will invest in prime residential apartments, serviced residences and mixed development projects in Singapore, China, Hong Kong, Malaysia, Thailand, South Korea and Japan.
Its first deal is under way - the purchase of a 49 per cent stake in two Bangkok freehold residential projects. The developer is Asian Property Development, one of Thailand’s largest listed residential property developers.
Both projects will target local buyers in the upper-middle-income group.
Pacific Star, although one of the newer property fund houses in Asia, is growing fast. It has launched three other funds, including the $580US million Eureka Office Fund, which owns commercial properties such as Temasek Tower, One George Street and The Adelphi.
It was also behind the Macquarie Meag Prime Real Estate Investment Trust, which is listed in Singapore and owns stakes in shopping malls Wisma Atria and Ngee Ann City.
Source : Straits Times - 30 Nov 2007
Tuesday, November 20, 2007
Lippo- Mapletree Indonesia Retail Trust
Shares of property trust Lippo- Mapletree Indonesia Retail Trust started trade yesterday at 77.5 cents in their Singapore stock market debut, down 3.1 per cent against the issue price of 80 cents a unit.
The units closed yesterday at 68 cents, down 12 cents or 15 per cent from the initial public offer (IPO) price.
Indonesia’s Lippo Group and Singapore’s Mapletree Investments sold 645.47 million shares at 80 cents, raising $516 million in their IPO for a joint property trust.
The Lippo-Mapletree Indonesia Retail Trust is based on around $1 billion worth of properties that comprise seven Indonesian shopping malls and seven retail spaces found in other malls, the prospectus said.
The listing of the Indonesian trust comes after Saizen Real Estate Investment Trust (Reit), which is based on residential buildings in Japan, tumbled 14 per cent in its Singapore market debut on more than a week ago.
Saizen’s sharp fall prompted Japan’s Asia Pacific Land to delay a US$350 million IPO in Singapore.
Mapletree, which is owned by Singapore investment company Temasek Holdings , has a 40 per cent stake in the joint venture that will manage the Indonesian trust.
The Lippo conglomerate, controlled by Indonesia’s Riady family, owns the remaining 60 per cent. — Reuters
Source : Business Times - 20 Nov 2007
The units closed yesterday at 68 cents, down 12 cents or 15 per cent from the initial public offer (IPO) price.
Indonesia’s Lippo Group and Singapore’s Mapletree Investments sold 645.47 million shares at 80 cents, raising $516 million in their IPO for a joint property trust.
The Lippo-Mapletree Indonesia Retail Trust is based on around $1 billion worth of properties that comprise seven Indonesian shopping malls and seven retail spaces found in other malls, the prospectus said.
The listing of the Indonesian trust comes after Saizen Real Estate Investment Trust (Reit), which is based on residential buildings in Japan, tumbled 14 per cent in its Singapore market debut on more than a week ago.
Saizen’s sharp fall prompted Japan’s Asia Pacific Land to delay a US$350 million IPO in Singapore.
Mapletree, which is owned by Singapore investment company Temasek Holdings , has a 40 per cent stake in the joint venture that will manage the Indonesian trust.
The Lippo conglomerate, controlled by Indonesia’s Riady family, owns the remaining 60 per cent. — Reuters
Source : Business Times - 20 Nov 2007
Friday, November 2, 2007
Morley sets up first Asia office
Morley sets up first Asia office
By SIOW LI SEN
ONE of the largest property fund managers in Europe yesterday announced that it is setting up its first Asia office, in Singapore.
Morley Fund Management, which has plans to invest US$10 billion in the region over the next four years, said it has identified Singapore as key to its growth strategy.
Nick Mansley, Morley’s director of property strategy, told BT that the Singapore office will be the hub for the firm’s Asian property business. Morley, the asset management arm of UK-based Aviva plc said in a statement that it has appointed Nick Ridgewell to head its Asian property business based in Singapore. He was previously managing director of Macquarie Bank’s real estate business in Hong Kong.
‘We have strong ambitions for our property business in Asia and are confident we can replicate the rapid growth we have achieved in Europe,’ said Ian Womack, Morley’s managing director, property.
Morley’s property investment business has grown rapidly in recent years with more than US$60 billion invested in property assets in the UK and the rest of Europe. Mr Womack said that Mr Ridgewell’s expertise will be critical in supporting Morley’s strategy of leveraging on the robust expansion of Singapore’s property sector and growth in the real estate funds business.
‘Singapore will be a key growth market for Morley,’ Mr Womack said. ‘We are working on funds which will invest in Singapore.’
He said while investment in Singapore will be opportunistic, the strategy will not be deterred by the high prices here as ‘Singapore is a relatively safe market in the Asian context’.
Morley, which opened for business in Asia in April this year, will work with multiple joint venture and fund partners in Japan, China, South Korea and India to seek out developments and properties to meet its clients’ needs.
Firms within the Morley group of companies manage £pounds;168 billion (S$504 billion) as at June 30.
Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Aviva Morley name. The property team manages in excess of £pounds;32 billion of UK and European property assets.
Source : Business Times - 02 Nov 2007
By SIOW LI SEN
ONE of the largest property fund managers in Europe yesterday announced that it is setting up its first Asia office, in Singapore.
Morley Fund Management, which has plans to invest US$10 billion in the region over the next four years, said it has identified Singapore as key to its growth strategy.
Nick Mansley, Morley’s director of property strategy, told BT that the Singapore office will be the hub for the firm’s Asian property business. Morley, the asset management arm of UK-based Aviva plc said in a statement that it has appointed Nick Ridgewell to head its Asian property business based in Singapore. He was previously managing director of Macquarie Bank’s real estate business in Hong Kong.
‘We have strong ambitions for our property business in Asia and are confident we can replicate the rapid growth we have achieved in Europe,’ said Ian Womack, Morley’s managing director, property.
Morley’s property investment business has grown rapidly in recent years with more than US$60 billion invested in property assets in the UK and the rest of Europe. Mr Womack said that Mr Ridgewell’s expertise will be critical in supporting Morley’s strategy of leveraging on the robust expansion of Singapore’s property sector and growth in the real estate funds business.
‘Singapore will be a key growth market for Morley,’ Mr Womack said. ‘We are working on funds which will invest in Singapore.’
He said while investment in Singapore will be opportunistic, the strategy will not be deterred by the high prices here as ‘Singapore is a relatively safe market in the Asian context’.
Morley, which opened for business in Asia in April this year, will work with multiple joint venture and fund partners in Japan, China, South Korea and India to seek out developments and properties to meet its clients’ needs.
Firms within the Morley group of companies manage £pounds;168 billion (S$504 billion) as at June 30.
Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Aviva Morley name. The property team manages in excess of £pounds;32 billion of UK and European property assets.
Source : Business Times - 02 Nov 2007
Tuesday, October 30, 2007
SUNTEC Reit has reported fourth-quarter income available for distribution of $30.4 million, an increase of 22.2 per cent from $24.8 million a year a
SUNTEC Reit has reported fourth-quarter income available for distribution of $30.4 million, an increase of 22.2 per cent from $24.8 million a year ago.
For the same July 1-Sept 30 period, Suntec Reit recorded gross revenue of $51.1 million, an increase of 13.7 per cent year-on-year. Net property income was up 12 per cent up at $36.6 million while distribution per unit (DPU) was 2.122 cents, up 11.3 per cent.
The Reit’s stake in Suntec City Mall and Office Towers contributes 87.4 per cent of its net property income (NPI) and it reported that Suntec office leases were secured at higher rental rates of between $11 and $13 per square foot (psf) per month, and the committed office occupancy at Suntec City is at 99.8 per cent.
Suntec Reit also reported that the committed retail passing rent at Suntec City Mall hit a new high of $10.46 psf per month.
The Reit, which also owns Park Mall and Chijmes, reported that the passing rents there rose to $6.60 psf per month and $10.68 psf per month respectively.
Suntec Reit also recognised a revaluation surplus of $677.5 million for the quarter after independent valuations of its porfolio was valued at $4.57 billion (as at Sept 30).
On a full-year basis (Oct 1, 2006 to Sept 30, 2007), income available for distribution was $115.4 million, up 21.6 per cent from $94.9 million in the corresponding period a year ago. Net property income was up 11.8 per cent at $140.6 million and DPU was up 11.8 per cent at 8.15 cents.
Based on the closing price of $1.84 on Oct 26, Suntec Reit’s distribution yield was 4.4 per cent, up 11.8 per cent compared to the previous year.
Yeo See Kiat, CEO of Reit manager ARA Trust Management said: ‘On the acquisition front, we have entered into an agreement to acquire one-third interest in One Raffles Quay which will be completed shortly.’
Suntec Reit’s other income revenue from A&P, pushcarts and kiosks for FY07 grew 10.2 per cent year-on-year, surpassing the $6 million mark.
For its current office portfolio, 26.8 per cent of leases are expected to expire next year, with 42.6 per cent expiring the following year.
For its retail portfolio, 30.4 per cent of the leases are expected to expire next year, with 23.4 per cent expiring the following year.
Suntec Reit ended the trading day yesterday at $1.84 per share, unchanged.
Source : Business Times - 30 Oct 2007
For the same July 1-Sept 30 period, Suntec Reit recorded gross revenue of $51.1 million, an increase of 13.7 per cent year-on-year. Net property income was up 12 per cent up at $36.6 million while distribution per unit (DPU) was 2.122 cents, up 11.3 per cent.
The Reit’s stake in Suntec City Mall and Office Towers contributes 87.4 per cent of its net property income (NPI) and it reported that Suntec office leases were secured at higher rental rates of between $11 and $13 per square foot (psf) per month, and the committed office occupancy at Suntec City is at 99.8 per cent.
Suntec Reit also reported that the committed retail passing rent at Suntec City Mall hit a new high of $10.46 psf per month.
The Reit, which also owns Park Mall and Chijmes, reported that the passing rents there rose to $6.60 psf per month and $10.68 psf per month respectively.
Suntec Reit also recognised a revaluation surplus of $677.5 million for the quarter after independent valuations of its porfolio was valued at $4.57 billion (as at Sept 30).
On a full-year basis (Oct 1, 2006 to Sept 30, 2007), income available for distribution was $115.4 million, up 21.6 per cent from $94.9 million in the corresponding period a year ago. Net property income was up 11.8 per cent at $140.6 million and DPU was up 11.8 per cent at 8.15 cents.
Based on the closing price of $1.84 on Oct 26, Suntec Reit’s distribution yield was 4.4 per cent, up 11.8 per cent compared to the previous year.
Yeo See Kiat, CEO of Reit manager ARA Trust Management said: ‘On the acquisition front, we have entered into an agreement to acquire one-third interest in One Raffles Quay which will be completed shortly.’
Suntec Reit’s other income revenue from A&P, pushcarts and kiosks for FY07 grew 10.2 per cent year-on-year, surpassing the $6 million mark.
For its current office portfolio, 26.8 per cent of leases are expected to expire next year, with 42.6 per cent expiring the following year.
For its retail portfolio, 30.4 per cent of the leases are expected to expire next year, with 23.4 per cent expiring the following year.
Suntec Reit ended the trading day yesterday at $1.84 per share, unchanged.
Source : Business Times - 30 Oct 2007
Friday, October 26, 2007
ASCOTT Residence Trust (ART), the first pan-Asian serviced residence real estate investment trust (Reit), achieved an 84 per cent
ASCOTT Residence Trust (ART), the first pan-Asian serviced residence real estate investment trust (Reit), achieved an 84 per cent year-on-year growth in unitholders’ distribution to $12 million for the third quarter ended Sept 30. The results, which also exceeded its own estimate by 9 per cent, were underpinned by strong operating performance and accretive acquisitions.
This gave a distribution per unit of 1.99 cents for the quarter, which is 39 per cent higher than for the corresponding period last year and 9 per cent better than forecast.
What stood out was that revenues per available unit for its serviced residences in the Philippines and Singapore were 32 per cent and 22 per cent better than forecast in the third quarter.
‘As part of the overall growth strategy, ART will continue to acquire quality serviced residences and rental housing properties to achieve a portfolio value of $2 billion by end-2008,’ said Lim Jit Poh, chairman of Ascott Residence Trust Management Ltd (ARTML), the manager of the trust.
ART has a geographically diversified portfolio of 18 properties in 10 cities across seven countries including Australia, China, Indonesia, Japan, the Philippines, Singapore and Vietnam. Its portfolio value is currently $1.2 billion, comprising of 2,952 serviced residence units.
‘Demand for serviced residences is expected to remain strong and we are confident of delivering the forecast distribution per unit of 7.27 cents for the year,’ ARTML’s chief executive Chong Kee Hiong said.
Source : Business Times - 25 Oct 2007
This gave a distribution per unit of 1.99 cents for the quarter, which is 39 per cent higher than for the corresponding period last year and 9 per cent better than forecast.
What stood out was that revenues per available unit for its serviced residences in the Philippines and Singapore were 32 per cent and 22 per cent better than forecast in the third quarter.
‘As part of the overall growth strategy, ART will continue to acquire quality serviced residences and rental housing properties to achieve a portfolio value of $2 billion by end-2008,’ said Lim Jit Poh, chairman of Ascott Residence Trust Management Ltd (ARTML), the manager of the trust.
ART has a geographically diversified portfolio of 18 properties in 10 cities across seven countries including Australia, China, Indonesia, Japan, the Philippines, Singapore and Vietnam. Its portfolio value is currently $1.2 billion, comprising of 2,952 serviced residence units.
‘Demand for serviced residences is expected to remain strong and we are confident of delivering the forecast distribution per unit of 7.27 cents for the year,’ ARTML’s chief executive Chong Kee Hiong said.
Source : Business Times - 25 Oct 2007
MACARTHURCOOK Industrial Reit (MI-Reit) said yesterday that its distributable income for the second quarter ended Sept 30 came in at $4.85 million
MACARTHURCOOK Industrial Reit (MI-Reit) said yesterday that its distributable income for the second quarter ended Sept 30 came in at $4.85 million, with distribution per unit (DPU) at 1.86 cents, both in line with its forecast.
This worked out to an annualised DPU of 7.38 cents, said MI-Reit. The annualised yield is 6.05 per cent based on the closing price of $1.22 per unit on Sept 30.
Its net property income of $5.91 million for the quarter was higher than the $4.7 million seen in the preceding quarter but was a 0.6 per cent dip from its own estimate.
Thanks to a revaluation of the initial 12 properties in MI-Reit’s portfolio, its net asset value per unit rose by 13.3 per cent quarter-on-quarter to $1.28, and raised its book value from $316.2 million to $354 million at the end of the fiscal second quarter.
‘In the short time since listing on April 19, we have successfully executed the acquisition of three properties; two of which are pending completion with an aggregate value of $109.3 million and the third, which has been completed for $16.8 million,’ said Chris Calvert, chief executive of the MI-Reit manager.
‘We continue to be focused on achieving our target of $500 million in acquisitions per annum,’ he added.
He noted that these acquisitions will enhance income stability and diversification as a result of the reduced reliance on any single asset for income.
Over the next 12-18 months, a majority of MI-Reit’s acquisitions will be made in Singapore but investment grade industrial property in Japan, Hong Kong, Korea and Malaysia will also be considered.
Given the bullish outlook on the rents and capital values of industrial space, which are poised for a further rise of up to 10 per cent in the final quarter of 2007, MI-Reit manager said it expects to deliver an annualised distribution of 7.58 cents for the current financial year ending March 31, 2008, in line with forecasts.
MI-Reit also announced yesterday that it has signed an agreement to buy a logistics and warehouse building at 11 Changi South Street 3 from Prologis Singapore Pte Ltd for $20.8 million. The property will then be sub-leased to its current tenant, Builders Shop Pte Ltd, for the remainder of the existing 10- year lease term that commenced on Dec 16, 2004.
At an initial yield of 7.23 per cent, the acquisition is accretive to MI-Reit’s DPU, it said, and is estimated to raise its fiscal 2008 DPU by 0.23 cent to 7.64 cents per unit and fiscal 2009 DPU by 0.22 cents to 7.81 cents per unit.
Source : Business Times - 25 Oct 2007
This worked out to an annualised DPU of 7.38 cents, said MI-Reit. The annualised yield is 6.05 per cent based on the closing price of $1.22 per unit on Sept 30.
Its net property income of $5.91 million for the quarter was higher than the $4.7 million seen in the preceding quarter but was a 0.6 per cent dip from its own estimate.
Thanks to a revaluation of the initial 12 properties in MI-Reit’s portfolio, its net asset value per unit rose by 13.3 per cent quarter-on-quarter to $1.28, and raised its book value from $316.2 million to $354 million at the end of the fiscal second quarter.
‘In the short time since listing on April 19, we have successfully executed the acquisition of three properties; two of which are pending completion with an aggregate value of $109.3 million and the third, which has been completed for $16.8 million,’ said Chris Calvert, chief executive of the MI-Reit manager.
‘We continue to be focused on achieving our target of $500 million in acquisitions per annum,’ he added.
He noted that these acquisitions will enhance income stability and diversification as a result of the reduced reliance on any single asset for income.
Over the next 12-18 months, a majority of MI-Reit’s acquisitions will be made in Singapore but investment grade industrial property in Japan, Hong Kong, Korea and Malaysia will also be considered.
Given the bullish outlook on the rents and capital values of industrial space, which are poised for a further rise of up to 10 per cent in the final quarter of 2007, MI-Reit manager said it expects to deliver an annualised distribution of 7.58 cents for the current financial year ending March 31, 2008, in line with forecasts.
MI-Reit also announced yesterday that it has signed an agreement to buy a logistics and warehouse building at 11 Changi South Street 3 from Prologis Singapore Pte Ltd for $20.8 million. The property will then be sub-leased to its current tenant, Builders Shop Pte Ltd, for the remainder of the existing 10- year lease term that commenced on Dec 16, 2004.
At an initial yield of 7.23 per cent, the acquisition is accretive to MI-Reit’s DPU, it said, and is estimated to raise its fiscal 2008 DPU by 0.23 cent to 7.64 cents per unit and fiscal 2009 DPU by 0.22 cents to 7.81 cents per unit.
Source : Business Times - 25 Oct 2007
FRASERS Centrepoint Trust, which owns three shopping malls in Singapore, may expand in China and Australia, seeking to tap rising consumer spending
FRASERS Centrepoint Trust, which owns three shopping malls in Singapore, may expand in China and Australia, seeking to tap rising consumer spending in the region.
‘We typically would like to go to a market where we’ve got some competitive advantage,’ Christopher Tang, chief executive officer of Frasers Centrepoint Asset Management Ltd, which manages the trust, said in an interview yesterday. ‘China is one of those, Australia is the other.’
Buying shopping malls in China would give Frasers access to a market where retail sales surged 16 per cent in the first nine months of this year, while Australia’s economy is benefiting from the lowest jobless rate in 33 years, which has stoked wage growth and fuelled consumer spending.
Mr Tang declined to specify acquisition targets, saying they were ‘opportunistic’. India is also on the trust’s ‘watch list’ for its expansion plans.
Frasers on June 5 bought a 27 per cent stake in Hektar Real Estate Investment Trust, which owns shopping malls in Malaysia, for RM104.5 million (S$45.4 million).
In Singapore, Frasers will add the Centrepoint shopping mall on Orchard Road to the trust, Mr Tang said, declining to specify a time frame. The Centrepoint mall is owned by Frasers’ parent, Fraser & Neave Ltd.
Frasers on Monday said it will distribute $10.3 million to its shareholders for the three months ended Sept 30, beating its forecast of $9.1 million as it raised rents at its properties.
Frasers fell 2 cents to close at 148 cents yesterday. — Bloomberg
Source : Business Times - 24 Oct 2007
‘We typically would like to go to a market where we’ve got some competitive advantage,’ Christopher Tang, chief executive officer of Frasers Centrepoint Asset Management Ltd, which manages the trust, said in an interview yesterday. ‘China is one of those, Australia is the other.’
Buying shopping malls in China would give Frasers access to a market where retail sales surged 16 per cent in the first nine months of this year, while Australia’s economy is benefiting from the lowest jobless rate in 33 years, which has stoked wage growth and fuelled consumer spending.
Mr Tang declined to specify acquisition targets, saying they were ‘opportunistic’. India is also on the trust’s ‘watch list’ for its expansion plans.
Frasers on June 5 bought a 27 per cent stake in Hektar Real Estate Investment Trust, which owns shopping malls in Malaysia, for RM104.5 million (S$45.4 million).
In Singapore, Frasers will add the Centrepoint shopping mall on Orchard Road to the trust, Mr Tang said, declining to specify a time frame. The Centrepoint mall is owned by Frasers’ parent, Fraser & Neave Ltd.
Frasers on Monday said it will distribute $10.3 million to its shareholders for the three months ended Sept 30, beating its forecast of $9.1 million as it raised rents at its properties.
Frasers fell 2 cents to close at 148 cents yesterday. — Bloomberg
Source : Business Times - 24 Oct 2007
HELPED by higher rental rates from its assets, Ascendas India Trust (a-iTrust) achieved distributable income of $22.2 million for the half year
HELPED by higher rental rates from its assets, Ascendas India Trust (a-iTrust) achieved distributable income of $22.2 million for the half year ended Sept 30, beating its estimate by 17 per cent.
Its distribution per unit for the period was 2.95 cents, giving an annualised yield of 5 per cent based on its initial public offer price of $1.18 per unit.
Its net property income touched $28.7 million, 66 per cent higher than the year-ago period and 18 per cent better than forecast.
a-iTrust has a diversified portfolio of four IT parks in Bangalore, Chennai and Hyderabad.
Over the first half year, 700,000 square feet of space within the portfolio of operating buildings was renewed or leased, at higher average rental rates than before. The overall occupancy rate of a-iTrust’s portfolio was 99 per cent as at Sept 30.
Ascendas Property Fund Trustee, the trustee-manager of a-iTrust, said it expects the trust to deliver the forecast performance for the second half of the year, and hence is confident of at least meeting the DPU forecast of 5.6 cents for the full year.
‘We are pleased to report a strong set of results which has benefited from the vibrant Indian IT-ITES sector, resounding support from the user-clients and the trustee-manager’s proactive asset and portfolio management,’ said the chief executive officer of the trustee-manager, Jonathan Yap. ‘We remain focused to build on the momentum and deliver returns to unitholders.’
The two completing buildings in the a-iTrust’s portfolio - Crest and Vega - have received strong pre-commitment of 73 per cent and 72 per cent of space respectively and income contribution is expected to start in the second half of 2007.
Besides having a right of first refusal from Ascendas Land International to acquire income-accretive business space, the trustee-manager said it is also pursuing acquisition opportunities from the market.
Source : Business Times - 24 Oct 2007
Its distribution per unit for the period was 2.95 cents, giving an annualised yield of 5 per cent based on its initial public offer price of $1.18 per unit.
Its net property income touched $28.7 million, 66 per cent higher than the year-ago period and 18 per cent better than forecast.
a-iTrust has a diversified portfolio of four IT parks in Bangalore, Chennai and Hyderabad.
Over the first half year, 700,000 square feet of space within the portfolio of operating buildings was renewed or leased, at higher average rental rates than before. The overall occupancy rate of a-iTrust’s portfolio was 99 per cent as at Sept 30.
Ascendas Property Fund Trustee, the trustee-manager of a-iTrust, said it expects the trust to deliver the forecast performance for the second half of the year, and hence is confident of at least meeting the DPU forecast of 5.6 cents for the full year.
‘We are pleased to report a strong set of results which has benefited from the vibrant Indian IT-ITES sector, resounding support from the user-clients and the trustee-manager’s proactive asset and portfolio management,’ said the chief executive officer of the trustee-manager, Jonathan Yap. ‘We remain focused to build on the momentum and deliver returns to unitholders.’
The two completing buildings in the a-iTrust’s portfolio - Crest and Vega - have received strong pre-commitment of 73 per cent and 72 per cent of space respectively and income contribution is expected to start in the second half of 2007.
Besides having a right of first refusal from Ascendas Land International to acquire income-accretive business space, the trustee-manager said it is also pursuing acquisition opportunities from the market.
Source : Business Times - 24 Oct 2007
Wednesday, October 24, 2007
‘Over the next four years we want to scale up our capital management business by being very active in key markets,’Mapletree Investments
Mapletree Investments intends to list a commercial trust with a $3-$3.5 billion portfolio in the next six months as it moves to grow its fee income and expand its footprint overseas, says chief executive Hiew Yoon Khong.
‘Over the next four years we want to scale up our capital management business by being very active in key markets,’ he told The Business Times in a recent interview.
Besides Singapore, the company is looking at China, India and Vietnam for acquisitions. And in the slightly longer term it is also interested in Taiwan, South Korea and Thailand - particularly their logistics and industrial sectors.
The plan is to bump up revenue from fee income to 50 per cent of overall revenue in the next three to five years - from just 9 per cent in Mapletree’s last financial year.
To grow the capital management business, the company has opted to look abroad. Right now only about 20 per cent of its portfolio is outside Singapore. But Mr Hiew said the proportion could be as high as 80 per cent in five years.
‘As a group, we hope to be able to break into one or two new markets a year,’ he said. The greatest opportunities, he believes, are in China, where Mapletree is now looking at second-tier cities. First-tier cities are ‘too crowded and the values are too high,’ he said.
In particular, Mapletree is trying to expand its commercial presence in Singapore and the region.
‘People know us as a logistics player, but as a company we are a lot more than that,’ Mr Hiew said. ‘Looking forward, we will be bidding for land to do development work. In Singapore, we are keen to have a bit more exposure to the office sector in particular.’
One way to do this is through the upcoming commercial trust - which the market has been waiting for.
The trust will likely contain VivoCity - Mapletree’s largest asset, with a book value of about $1.6 billion - as well as other commercial properties including office buildings Harbourfront Centre and PSA Building and nightspot St James Power Station, Mr Hiew said.
Mapletree is already lining up a pipeline of assets for the trust. In a break from tradition, the company this year started bidding for commercial land sites in Singapore.
In July it won a government land sales site at Anson Road/Enggor Street in a public tender that drew other big names such as CapitaLand and Keppel Land. Mapletree’s offer was 23 per cent higher than the next highest bid.
In addition, Mapletree is likely to launch a Reit based on assets in India, with its Indian property development partner Embassy Group, by the first half of 2008.
Market talk of Embassy’s Reit, which will be managed through a joint-venture partnership between Embassy and Mapletree, has been around since early this year. Mr Hiew confirmed plans for the Reit.
‘We will probably hold some sort of equity stake in the trust but that is not finalised yet,’ he said.
Mapletree has also secured a deal to co-manage the Lippo Group’s Indonesia-focused retail Reit. The prospectus for this Reit was lodged with the Monetary Authority of Singapore (MAS) last Friday.
Mr Hiew is also committed to growing Mapletree’s private equity franchises. For example, the company - together with its partner CIMB - will be launching its second Malaysia fund in the next six months.
Mapletree’s growing portfolio in Singapore and overseas will serve as an asset pipeline for both the existing Mapletree Logistics Trust and the new commercial trust, as well as any funds the company might set up in future.
‘We are very keen to support the growth of our Reits and fund business,’ Mr Hiew said.
With its asset-light strategy in place, the company will now be able to take on bigger projects and move faster on them.
Right now, assets under management stand at $2.2 billion, while Mapletree owns a further $4.8 billion of assets. Mr Hiew’s aim is to grow by $1 billion or so each year.
‘Four years ago we mapped out strategic initiatives for the company to enhance our value,’ he said. ‘When we review the programme now, we are happy with the progress to date but will look to scale up these businesses much more.’
Source : Business Times - 24 Oct 2007
‘Over the next four years we want to scale up our capital management business by being very active in key markets,’ he told The Business Times in a recent interview.
Besides Singapore, the company is looking at China, India and Vietnam for acquisitions. And in the slightly longer term it is also interested in Taiwan, South Korea and Thailand - particularly their logistics and industrial sectors.
The plan is to bump up revenue from fee income to 50 per cent of overall revenue in the next three to five years - from just 9 per cent in Mapletree’s last financial year.
To grow the capital management business, the company has opted to look abroad. Right now only about 20 per cent of its portfolio is outside Singapore. But Mr Hiew said the proportion could be as high as 80 per cent in five years.
‘As a group, we hope to be able to break into one or two new markets a year,’ he said. The greatest opportunities, he believes, are in China, where Mapletree is now looking at second-tier cities. First-tier cities are ‘too crowded and the values are too high,’ he said.
In particular, Mapletree is trying to expand its commercial presence in Singapore and the region.
‘People know us as a logistics player, but as a company we are a lot more than that,’ Mr Hiew said. ‘Looking forward, we will be bidding for land to do development work. In Singapore, we are keen to have a bit more exposure to the office sector in particular.’
One way to do this is through the upcoming commercial trust - which the market has been waiting for.
The trust will likely contain VivoCity - Mapletree’s largest asset, with a book value of about $1.6 billion - as well as other commercial properties including office buildings Harbourfront Centre and PSA Building and nightspot St James Power Station, Mr Hiew said.
Mapletree is already lining up a pipeline of assets for the trust. In a break from tradition, the company this year started bidding for commercial land sites in Singapore.
In July it won a government land sales site at Anson Road/Enggor Street in a public tender that drew other big names such as CapitaLand and Keppel Land. Mapletree’s offer was 23 per cent higher than the next highest bid.
In addition, Mapletree is likely to launch a Reit based on assets in India, with its Indian property development partner Embassy Group, by the first half of 2008.
Market talk of Embassy’s Reit, which will be managed through a joint-venture partnership between Embassy and Mapletree, has been around since early this year. Mr Hiew confirmed plans for the Reit.
‘We will probably hold some sort of equity stake in the trust but that is not finalised yet,’ he said.
Mapletree has also secured a deal to co-manage the Lippo Group’s Indonesia-focused retail Reit. The prospectus for this Reit was lodged with the Monetary Authority of Singapore (MAS) last Friday.
Mr Hiew is also committed to growing Mapletree’s private equity franchises. For example, the company - together with its partner CIMB - will be launching its second Malaysia fund in the next six months.
Mapletree’s growing portfolio in Singapore and overseas will serve as an asset pipeline for both the existing Mapletree Logistics Trust and the new commercial trust, as well as any funds the company might set up in future.
‘We are very keen to support the growth of our Reits and fund business,’ Mr Hiew said.
With its asset-light strategy in place, the company will now be able to take on bigger projects and move faster on them.
Right now, assets under management stand at $2.2 billion, while Mapletree owns a further $4.8 billion of assets. Mr Hiew’s aim is to grow by $1 billion or so each year.
‘Four years ago we mapped out strategic initiatives for the company to enhance our value,’ he said. ‘When we review the programme now, we are happy with the progress to date but will look to scale up these businesses much more.’
Source : Business Times - 24 Oct 2007
Mapletree’s asset portfolio also grew from $2.97 billion to $4.53 billion.
LISTED developers in Singapore now have a relatively new kid on the block to watch out for - Temasek-owned Mapletree Investments.
Under the stewardship of Hiew Yoon Khong, who took over the helm in August 2003, Mapletree has expanded its overseas presence and grown its capital management business.
And this year, the company has started going head-to-head with established developers to compete for land sites.
Mapletree’s strategy has translated into solid financial numbers.
During its 2006 financial year, Mapletree’s earnings crossed the billion-dollar mark for the first time - a milestone achieved by only one other property company in Singapore, CapitaLand. Mapletree’s net profit came to $1.07 billion, a seven-fold increase over the previous year.
While the bulk of the earnings spike was due to valuation gains from its newly-opened mega-mall VivoCity, operating revenue itself grew by 35 per cent to $216.6 million.
During the year, Mapletree’s asset portfolio also grew from $2.97 billion to $4.53 billion.
But more significant than the improved numbers is the fact that over the last few years, Mapletree has become a much more sophisticated entity.
Mr Hiew told BT that going forward, Mapletree will continue to grow its capital management business and overseas footprint - in line with what other developers in Singapore are doing.
Big but nimble
Growing the capital management business will also allow Mapletree to go asset-light, which will allow it to move more quickly and take on bigger projects.
For example, setting up the commercial trust, which will have a portfolio of $3 billion to $3.5 billion, means that Mapletree will be able to recycle assets worth that amount, said Mr Hiew. It is quite clear that he intends to put the money to good use. Mapletree has signalled this year that it is more than just a holding company for state-owned properties by bidding for and winning a government land sales site at Anson Road/Enggor Street in July.
Mapletree’s offer was a bullish 23 per cent higher than the next highest offer - a clear sign that the company is serious about building up its commercial landbank.
Last month, Mapletree also formed a joint venture with CapitaLand to offer $1.8 billion - or $1,281 per square foot per plot ratio - for a white site at Marina Bay, but lost out to Macquarie Global Property Advisors.
With the bulk of its commercial properties divested into the upcoming trust, a flush-with-cash Mapletree will no doubt be a serious contender for sites.
Mr Hiew said that he wants to grow Mapletree’s exposure to the office sector in Singapore in particular.
The company has certainly come a long way since it was incorporated in December 2000 to hold the property assets transferred by PSA to Temasek Holdings.
Going forward, it will be interesting to watch Mapletree make its mark on the property landscape as it comes into its own over the next few years.
Source : Business Times - 24 Oct 2007
Under the stewardship of Hiew Yoon Khong, who took over the helm in August 2003, Mapletree has expanded its overseas presence and grown its capital management business.
And this year, the company has started going head-to-head with established developers to compete for land sites.
Mapletree’s strategy has translated into solid financial numbers.
During its 2006 financial year, Mapletree’s earnings crossed the billion-dollar mark for the first time - a milestone achieved by only one other property company in Singapore, CapitaLand. Mapletree’s net profit came to $1.07 billion, a seven-fold increase over the previous year.
While the bulk of the earnings spike was due to valuation gains from its newly-opened mega-mall VivoCity, operating revenue itself grew by 35 per cent to $216.6 million.
During the year, Mapletree’s asset portfolio also grew from $2.97 billion to $4.53 billion.
But more significant than the improved numbers is the fact that over the last few years, Mapletree has become a much more sophisticated entity.
Mr Hiew told BT that going forward, Mapletree will continue to grow its capital management business and overseas footprint - in line with what other developers in Singapore are doing.
Big but nimble
Growing the capital management business will also allow Mapletree to go asset-light, which will allow it to move more quickly and take on bigger projects.
For example, setting up the commercial trust, which will have a portfolio of $3 billion to $3.5 billion, means that Mapletree will be able to recycle assets worth that amount, said Mr Hiew. It is quite clear that he intends to put the money to good use. Mapletree has signalled this year that it is more than just a holding company for state-owned properties by bidding for and winning a government land sales site at Anson Road/Enggor Street in July.
Mapletree’s offer was a bullish 23 per cent higher than the next highest offer - a clear sign that the company is serious about building up its commercial landbank.
Last month, Mapletree also formed a joint venture with CapitaLand to offer $1.8 billion - or $1,281 per square foot per plot ratio - for a white site at Marina Bay, but lost out to Macquarie Global Property Advisors.
With the bulk of its commercial properties divested into the upcoming trust, a flush-with-cash Mapletree will no doubt be a serious contender for sites.
Mr Hiew said that he wants to grow Mapletree’s exposure to the office sector in Singapore in particular.
The company has certainly come a long way since it was incorporated in December 2000 to hold the property assets transferred by PSA to Temasek Holdings.
Going forward, it will be interesting to watch Mapletree make its mark on the property landscape as it comes into its own over the next few years.
Source : Business Times - 24 Oct 2007
FRASERS Centrepoint Trust (FCT) has entered into a put and call option agreement to acquire the upcoming shopping mall Northpoint 2
FRASERS Centrepoint Trust (FCT) has entered into a put and call option agreement to acquire the upcoming shopping mall Northpoint 2 for between $139.5 million and $170.5 million, it said yesterday.
The mall, which is being developed by Frasers Centrepoint, will be completed by August 2008. FCT will then acquire it from its parent company in the fourth quarter of 2008.
‘We are doing this (entering the put and call option agreement) now so that we can get a certainty of ownership,’ said Christopher Tang, chief executive of FCT’s manager.
FCT has plans to integrate the upcoming mall with Northpoint, which is already part of its portfolio.
The $30 million asset enhancement programme is expected to be completed by end-June 2009. Together, the two malls will have a combined net lettable area (NLA) of some 232,000 sq ft, an increase of some 56 per cent over Northpoint’s current NLA.
FCT said that the mid-point of the agreed price range for Northpoint 2 - $155 million - is based on an open market valuation. The actual purchase price will be determined by taking the average of two valuations - one each by FCT and Frasers Centrepoint - nearer to the time of the transaction.
FCT also reported its financial results for the fourth quarter ended September 30, 2007 yesterday.
The trust said that distributable income for the three months came to $10.3 million, 13.5 per cent higher than the forecast of $9.1 million as new and renewed leases as well as higher occupancy rates in its malls contributed to increased revenues.
Distribution per unit (DPU) for the quarter came to 1.67 cents, up 13.6 per cent from forecast of 1.47 cents.
Net property income came to $12.8 million, some 2.6 per cent higher than the forecast of $12.5 million.
For its full financial year, FCT reported distributable income of $40.4 million, 11.1 per cent higher than its forecast. DPU came to 6.55 cents, 12.0 per cent higher than forecast. And full-year net property income came to $51.7 million, 3.2 per cent higher than its forecast.
There are no comparable figures for the previous corresponding periods as FCT was only listed on July 5 last year.
FCT has three more Singapore malls awaiting injection into the Reit - Yew Tee Point, Bedok Mall and The Centrepoint.
Yew Tee Point will be injected in early 2009 and Bedok Mall in 2010, Mr Tang said. He added that there is no timeline at present for Centrepoint’s injection. The four malls together will double the trust’s current portfolio.
The trust will also look at China and Australia for growth together with Malaysia, where it already has a presence through its stake in Hektar Reit, Mr Tang said.
FCT’s shares closed unchanged at $1.50 yesterday.
Source : Business Times - 23 Oct 2007
The mall, which is being developed by Frasers Centrepoint, will be completed by August 2008. FCT will then acquire it from its parent company in the fourth quarter of 2008.
‘We are doing this (entering the put and call option agreement) now so that we can get a certainty of ownership,’ said Christopher Tang, chief executive of FCT’s manager.
FCT has plans to integrate the upcoming mall with Northpoint, which is already part of its portfolio.
The $30 million asset enhancement programme is expected to be completed by end-June 2009. Together, the two malls will have a combined net lettable area (NLA) of some 232,000 sq ft, an increase of some 56 per cent over Northpoint’s current NLA.
FCT said that the mid-point of the agreed price range for Northpoint 2 - $155 million - is based on an open market valuation. The actual purchase price will be determined by taking the average of two valuations - one each by FCT and Frasers Centrepoint - nearer to the time of the transaction.
FCT also reported its financial results for the fourth quarter ended September 30, 2007 yesterday.
The trust said that distributable income for the three months came to $10.3 million, 13.5 per cent higher than the forecast of $9.1 million as new and renewed leases as well as higher occupancy rates in its malls contributed to increased revenues.
Distribution per unit (DPU) for the quarter came to 1.67 cents, up 13.6 per cent from forecast of 1.47 cents.
Net property income came to $12.8 million, some 2.6 per cent higher than the forecast of $12.5 million.
For its full financial year, FCT reported distributable income of $40.4 million, 11.1 per cent higher than its forecast. DPU came to 6.55 cents, 12.0 per cent higher than forecast. And full-year net property income came to $51.7 million, 3.2 per cent higher than its forecast.
There are no comparable figures for the previous corresponding periods as FCT was only listed on July 5 last year.
FCT has three more Singapore malls awaiting injection into the Reit - Yew Tee Point, Bedok Mall and The Centrepoint.
Yew Tee Point will be injected in early 2009 and Bedok Mall in 2010, Mr Tang said. He added that there is no timeline at present for Centrepoint’s injection. The four malls together will double the trust’s current portfolio.
The trust will also look at China and Australia for growth together with Malaysia, where it already has a presence through its stake in Hektar Reit, Mr Tang said.
FCT’s shares closed unchanged at $1.50 yesterday.
Source : Business Times - 23 Oct 2007
SINGAPORE’S first healthcare real estate investment trust (Reit) said yesterday that its third-quarter distributable income came to $4.61 million
SINGAPORE’S first healthcare real estate investment trust (Reit) said yesterday that its third-quarter distributable income came to $4.61 million - 5.4 per cent higher than forecast - due to rental contributions from newly acquired properties.
First Real Estate Investment Trust (First Reit) bought Pacific Healthcare Nursing Homes at Bukit Merah and Senja in April, The Lentor Residence in June and Adam Road Hospital in July.
Distribution per unit (DPU) came to 1.72 cents for Q3 ended Sept 30, ahead of a 1.6 cents forecast. Net property income totalled $7 million, or 15.6 per cent higher than forecast.
Ronnie Tan, chief executive of Bowsprit Capital Corporation, which manages the Reit, said: ‘The regional macro-economic 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.’
The trust is confident of boosting the value of its assets to $500 million before end-2009, Dr Tan said.
First Reit now has eight properties worth $328 million. Its net asset value per unit came to 0.88 of a cent as at Sept 30.
The Reit recently ventured into China, where it agreed with hospitals in Wuxi, Shanghai and Jiangsu province to ‘explore potential acquisitions’.
Earlier this month, First Reit signed a memorandum of understanding to acquire the 90-bed Wuxi New District Phoenix Hospital. In August, it said that it was investing in a 500-bed hospital property in Jiangsu province.
Then, the following month, it agreed to invest in the property assets of the 200-bed Shanghai Woman and Child Healthcare Hospital and the proposed Hengshan Urology Hospital, both in Shanghai.
First Reit said that it is continuing to explore potential acquisitions with its sponsor Lippo Karawaci in Indonesia.
First Reit’s shares closed half a cent down at 77 cents yesterday, with 112,000 shares changing hands.
Source : Business Times - 23 October 2007
First Real Estate Investment Trust (First Reit) bought Pacific Healthcare Nursing Homes at Bukit Merah and Senja in April, The Lentor Residence in June and Adam Road Hospital in July.
Distribution per unit (DPU) came to 1.72 cents for Q3 ended Sept 30, ahead of a 1.6 cents forecast. Net property income totalled $7 million, or 15.6 per cent higher than forecast.
Ronnie Tan, chief executive of Bowsprit Capital Corporation, which manages the Reit, said: ‘The regional macro-economic 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.’
The trust is confident of boosting the value of its assets to $500 million before end-2009, Dr Tan said.
First Reit now has eight properties worth $328 million. Its net asset value per unit came to 0.88 of a cent as at Sept 30.
The Reit recently ventured into China, where it agreed with hospitals in Wuxi, Shanghai and Jiangsu province to ‘explore potential acquisitions’.
Earlier this month, First Reit signed a memorandum of understanding to acquire the 90-bed Wuxi New District Phoenix Hospital. In August, it said that it was investing in a 500-bed hospital property in Jiangsu province.
Then, the following month, it agreed to invest in the property assets of the 200-bed Shanghai Woman and Child Healthcare Hospital and the proposed Hengshan Urology Hospital, both in Shanghai.
First Reit said that it is continuing to explore potential acquisitions with its sponsor Lippo Karawaci in Indonesia.
First Reit’s shares closed half a cent down at 77 cents yesterday, with 112,000 shares changing hands.
Source : Business Times - 23 October 2007
Monday, October 22, 2007
INDONESIA’S Lippo Group will be raising up to $587.4 million with the planned Singapore listing of a real estate investment trust (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.
Source : Business Times - 20 Oct 2007
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.
Source : Business Times - 20 Oct 2007
ASCENDAS Real Estate Investment Trust (A-Reit) said yesterday its second-quarter distributable income rose 15 per cent to $46.4 million
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.
Source : Business Times - 20 Oct 2007
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.
Source : Business Times - 20 Oct 2007
Thursday, October 11, 2007
The surge in office rentals has lifted the third quarter distributable income of K-REIT Asia by 31 percent from a year ago.
The surge in office rentals has lifted the third quarter distributable income of K-REIT Asia by 31 percent from a year ago.
The commercial property trust has booked an income of S$5.4 million for the three months to September.
This will work out to a distribution per unit of 2.23 cents for the period.
Property income rose 18 percent to over S$10 million.
As for its outlook, K-REIT says it expects demand for prime office space to remain strong.
This is because of the continued economic growth, sound business prospects and further expansion of the financial services sector.
K-REIT projects prime office rents to increase further over the next two to three years.
It adds that the buoyant prime office market will continue to augur well for its portfolio of office buildings in the CBD and the new downtown at Marina Bay.
Source : ChannelNewsAsia - 10 Oct 2007
The commercial property trust has booked an income of S$5.4 million for the three months to September.
This will work out to a distribution per unit of 2.23 cents for the period.
Property income rose 18 percent to over S$10 million.
As for its outlook, K-REIT says it expects demand for prime office space to remain strong.
This is because of the continued economic growth, sound business prospects and further expansion of the financial services sector.
K-REIT projects prime office rents to increase further over the next two to three years.
It adds that the buoyant prime office market will continue to augur well for its portfolio of office buildings in the CBD and the new downtown at Marina Bay.
Source : ChannelNewsAsia - 10 Oct 2007
Tuesday, October 9, 2007
Saizen Real Estate Investment Trust (Reit), based entirely on Japanese property assets, has lodged its prospectus to raise as much as $244.4 million
Saizen Real Estate Investment Trust (Reit), based entirely on Japanese property assets, has lodged its prospectus to raise as much as $244.4 million (US$166 million) in Singapore, confirming a Reuters story last month.
A Hong-Kong based private equity group is selling 196.74 million units of Saizen in an initial public offer at between $1.00 and $1.08 per unit, with a further 29.5 million units to be sold if an over-allotment option is exercised.
Saizen Reit’s initial portfolio of 146 residential buildings are located in 12 cities across Japan. It does not own any property in Tokyo and Osaka.
The trust’s sponsor, Japan Regional Assets Manager, said in the prospectus that the regional residential properties generate higher yields than similar properties in Tokyo and Osaka.
The properties are valued at $626.8 million, with 27 per cent of their aggregate income generated from the city of Sapporo.
Saizen Reit expects to add a further 15 properties worth $71.4 million.
The REIT is forecast to pay dividend yields of between 6.09 and 6.51 per cent per unit this year and 5.29-5.65 per cent next year.
Credit Suisse and Morgan Stanley are arranging the deal.
Unlike Singapore Reits, Japanese-listed trusts are not allowed to hold offshore assets.
Other property trusts based on Japanese assets are expected to emerge soon in Singapore, which is Asia Pacific’s third largest Reit market after Australia and Japan.
JPMorgan and Lehman Bros are believed to be helping Tokyo-based Asia Pacific Land Group raise at least $500 million (US$333 million) from the divestment of some of its Japanese retail and office properties via a Singapore-listed Reit, while Japanese real estate funds manager Re-plus is said to have hired Citigroup to arrange a property trust based on office buildings in China. — REUTERS
Source : Business Times - 8 Oct 2007
A Hong-Kong based private equity group is selling 196.74 million units of Saizen in an initial public offer at between $1.00 and $1.08 per unit, with a further 29.5 million units to be sold if an over-allotment option is exercised.
Saizen Reit’s initial portfolio of 146 residential buildings are located in 12 cities across Japan. It does not own any property in Tokyo and Osaka.
The trust’s sponsor, Japan Regional Assets Manager, said in the prospectus that the regional residential properties generate higher yields than similar properties in Tokyo and Osaka.
The properties are valued at $626.8 million, with 27 per cent of their aggregate income generated from the city of Sapporo.
Saizen Reit expects to add a further 15 properties worth $71.4 million.
The REIT is forecast to pay dividend yields of between 6.09 and 6.51 per cent per unit this year and 5.29-5.65 per cent next year.
Credit Suisse and Morgan Stanley are arranging the deal.
Unlike Singapore Reits, Japanese-listed trusts are not allowed to hold offshore assets.
Other property trusts based on Japanese assets are expected to emerge soon in Singapore, which is Asia Pacific’s third largest Reit market after Australia and Japan.
JPMorgan and Lehman Bros are believed to be helping Tokyo-based Asia Pacific Land Group raise at least $500 million (US$333 million) from the divestment of some of its Japanese retail and office properties via a Singapore-listed Reit, while Japanese real estate funds manager Re-plus is said to have hired Citigroup to arrange a property trust based on office buildings in China. — REUTERS
Source : Business Times - 8 Oct 2007
Saturday, October 6, 2007
MAS issues revised property fund guidelines
MAS issues revised property fund guidelines
The Monetary Authority of Singapore (MAS) has issued revised Property Fund Guidelines (REIT Guidelines). The revised Guidelines are intended to improve safeguards for investors and to provide greater clarity and flexibility for commercial transactions. The Guidelines have also been rationalised to reduce compliance costs in a number of areas.
The changes include:
Enhancing the disclosure requirements on the use of short-term yield-enhancing arrangements;
Providing guidance on permissible fixed-term management contracts;
Disallowing discounts to institutional investors for subscriptions made at the time of listing of a REIT;
Specifying safeguards for REITs that intend to pay dividends in excess of current income;
Requiring a REIT to invest at least 75% of its assets in income-producing real estate; and
Removing the 5% single party limit for investments in real-estate related securities.
MAS will amend the Securities and Futures Act (SFA) to include REIT management as a regulated activity. The Securities and Futures (Licensing and Conduct of Business) Regulations and Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations will also be amended to set out the capital requirements and licence fees for REIT managers, as well as provide for a transitional period for existing industry participants.
In revising the REIT Guidelines, MAS considered feedback from its public consultation in March this year and held discussions with REIT players. Our responses to the comments received from the public consultation are published on the MAS website. MAS will continue to engage industry players and ensure that our regulatory regime remains progressive and keeps pace with the market’s development and growth.
Re-disseminated by The Asian Banker
The Monetary Authority of Singapore (MAS) has issued revised Property Fund Guidelines (REIT Guidelines). The revised Guidelines are intended to improve safeguards for investors and to provide greater clarity and flexibility for commercial transactions. The Guidelines have also been rationalised to reduce compliance costs in a number of areas.
The changes include:
Enhancing the disclosure requirements on the use of short-term yield-enhancing arrangements;
Providing guidance on permissible fixed-term management contracts;
Disallowing discounts to institutional investors for subscriptions made at the time of listing of a REIT;
Specifying safeguards for REITs that intend to pay dividends in excess of current income;
Requiring a REIT to invest at least 75% of its assets in income-producing real estate; and
Removing the 5% single party limit for investments in real-estate related securities.
MAS will amend the Securities and Futures Act (SFA) to include REIT management as a regulated activity. The Securities and Futures (Licensing and Conduct of Business) Regulations and Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations will also be amended to set out the capital requirements and licence fees for REIT managers, as well as provide for a transitional period for existing industry participants.
In revising the REIT Guidelines, MAS considered feedback from its public consultation in March this year and held discussions with REIT players. Our responses to the comments received from the public consultation are published on the MAS website. MAS will continue to engage industry players and ensure that our regulatory regime remains progressive and keeps pace with the market’s development and growth.
Re-disseminated by The Asian Banker
The Singapore Reit industry is only about five years old and many local investors have still not achieved the level of sophistication of their counter
ONE of the biggest challenges that CapitaMall Trust (CMT), Singapore’s first and still its largest real estate investment trust (Reit), faces when it comes to timing the release of information is balancing the needs of sophisticated institutional investors and mom-and-pop retail investors.
And it needs to further weigh that against how the information released will impact the trust’s negotiations with the authorities on renovations to its assets, tenants, and property sellers.
‘The Singapore Reit industry is only about five years old and many local investors have still not achieved the level of sophistication of their counterparts in more mature Reit markets such as Australia and the US,’ as Pua Seck Guan puts it. He is CEO of CapitaMall Trust Management Ltd (CMTML), the manager of CMT. The trust has grown from owning just three malls here worth $930 million when it was floated in July 2002 to 13 properties in Singapore today worth over $5 billion. These include Tampines Mall, Junction 8, IMM Building, Sembawang Shopping Centre, Bugis Junction and a 40 per cent interest in Raffles City Singapore.
In addition, CMT has a 20 per cent stake in CapitaRetail China Trust (CRCT), which owns a portfolio of seven malls worth around $690 million in Chinese cities like Beijing, Shanghai, Zhengzhou, Huhehaote and Wuhu.
‘Our investment in CRCT and participation in Singapore development projects are expected to drive continuous long-term growth for unitholders. CMT targets to grow its asset size in Singapore from its current $5.7 billion to $8 billion by 2010,’ Mr Pua says.
CMT is the largest Reit in Singapore by market capitalisation (about $6 billion as at Oct 1) and asset size.
The winner of SIAS - Most Transparent Company Award 2007, under the Reits section, CMTML stresses that upholding the highest level of corporate governance and transparency standards towards good investor relations practices is tied to the fundamentals of a Reit.
A Reit provides unitholders with regular income streams, coupled with growth in unit price over time.
Reits return virtually all, if not all, of their income to unitholders, and Reit managers publicly forecast the Reit’s income in terms of distribution per unit. The price at which the Reit trades in the stock market is a function of a given yield and total return expectation by investors.
Hence, timely disclosure of information affecting a Reit’s income is important to facilitate investors’ decision-making process.
‘We believe our consistent effort on this front has been well received by the investment community, which has led to our winning this prestigious award by SIAS for the fourth consecutive year,’ Mr Pua says.
CMT has delivered a total return of about 302 per cent as at June 30, 2007 to unitholders since its listing in July 2002, with about 254 per cent comprising capital appreciation of CMT’s unit price and 48 per cent coming from distributions to unit holders.
‘The stable quarterly distributions and sustainable total returns have been achieved through CMT’s multi-pronged strategy of yield-accretive acquisitions and investments, innovative asset enhancements, and proactive leasing and asset management,’ Mr Pua says.
CMT is also ‘actively exploring opportunities’ to undertake mall development projects in Singapore, Mr Pua reveals.
Source : Business Times - 5 Oct 2007
And it needs to further weigh that against how the information released will impact the trust’s negotiations with the authorities on renovations to its assets, tenants, and property sellers.
‘The Singapore Reit industry is only about five years old and many local investors have still not achieved the level of sophistication of their counterparts in more mature Reit markets such as Australia and the US,’ as Pua Seck Guan puts it. He is CEO of CapitaMall Trust Management Ltd (CMTML), the manager of CMT. The trust has grown from owning just three malls here worth $930 million when it was floated in July 2002 to 13 properties in Singapore today worth over $5 billion. These include Tampines Mall, Junction 8, IMM Building, Sembawang Shopping Centre, Bugis Junction and a 40 per cent interest in Raffles City Singapore.
In addition, CMT has a 20 per cent stake in CapitaRetail China Trust (CRCT), which owns a portfolio of seven malls worth around $690 million in Chinese cities like Beijing, Shanghai, Zhengzhou, Huhehaote and Wuhu.
‘Our investment in CRCT and participation in Singapore development projects are expected to drive continuous long-term growth for unitholders. CMT targets to grow its asset size in Singapore from its current $5.7 billion to $8 billion by 2010,’ Mr Pua says.
CMT is the largest Reit in Singapore by market capitalisation (about $6 billion as at Oct 1) and asset size.
The winner of SIAS - Most Transparent Company Award 2007, under the Reits section, CMTML stresses that upholding the highest level of corporate governance and transparency standards towards good investor relations practices is tied to the fundamentals of a Reit.
A Reit provides unitholders with regular income streams, coupled with growth in unit price over time.
Reits return virtually all, if not all, of their income to unitholders, and Reit managers publicly forecast the Reit’s income in terms of distribution per unit. The price at which the Reit trades in the stock market is a function of a given yield and total return expectation by investors.
Hence, timely disclosure of information affecting a Reit’s income is important to facilitate investors’ decision-making process.
‘We believe our consistent effort on this front has been well received by the investment community, which has led to our winning this prestigious award by SIAS for the fourth consecutive year,’ Mr Pua says.
CMT has delivered a total return of about 302 per cent as at June 30, 2007 to unitholders since its listing in July 2002, with about 254 per cent comprising capital appreciation of CMT’s unit price and 48 per cent coming from distributions to unit holders.
‘The stable quarterly distributions and sustainable total returns have been achieved through CMT’s multi-pronged strategy of yield-accretive acquisitions and investments, innovative asset enhancements, and proactive leasing and asset management,’ Mr Pua says.
CMT is also ‘actively exploring opportunities’ to undertake mall development projects in Singapore, Mr Pua reveals.
Source : Business Times - 5 Oct 2007
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