Indiabulls

[millionairemind]

Published June 1, 2009

Indiabulls Reit posts net property loss of $568,000

INDIABULLS Properties Investment Trust (IPIT) has posted a net property loss of $568,000 for the period May 7, 2008, to March 31, 2009, instead of the net property income of $103.3 million it had forecast for the April 1, 2008, to March 31, 2009, period in its listing prospectus.

The real estate investment trust (Reit) also booked a $1.01 billion impairment loss on development properties and a $232.1 million loss due to changes in fair value on investment property. These two items have not impacted on the trust's cashflows or credit facilities.

Inclusive of a $284 million income tax credit due to reversing deferred tax liability in tandem with the reduction in portfolio valuation, the trust posted a net loss of $960.1 million for the latest period, against a $52.8 million net income forecast in its prospectus.

'The trustee-manager is always in the process of evaluating various sources of funding and other means of effective capital management for IPIT, including carrying out a rights issue, though no firm decision has been taken to proceed with any specific means of fund-raising,' Indiabulls Property Management Trustee Pte Ltd said.

IPIT's gearing as at March 31 was 10 per cent.

The trust closed 0.5 cent lower on Friday at 31 cents.

Net asset value per unit at March 31 was 73.77 cents.

The Reit was listed on the Singapore Exchange in June last year with two properties in its portfolio, both uncompleted at the time of the trust's flotation. Its units were then priced at $1 each.

One Indiabulls Centre Tower 1 has since been completed, with the second tower also completed except for the top floors for which the relevant regulatory approvals are pending. Also, Tower 1 of Indiabulls Finance Centre has been completed to initial plans.

The board has decided to stick to its earlier plan to include a residential component at One Indiabulls Centre, and the plan is to launch the residential project shortly, according to the latest results statement issued on Saturday.

In its Q3 FY2009 results statement, the Reit's trustee-manager had said that leasing was expected to remain slow in the near term and the accelerated decline in demand for office space in its key target markets of the banking, finance, security and insurance sectors might result in the trust being unable to lease the properties at the forecast rates.

'During the fourth quarter of FY2009, the trustee-manager has begun to see tentative signs of stabilisation in leasing activity,' it added, with clients starting to make decisions regarding their real estate needs.

The trustee-manager has waived its entitlement to the management fee of about $2.2 million for Q4 ended March 31 to 'demonstrate its commitment to manage the trust in the best interest of unitholders'. In all, the trustee-manager has waived total management fees of $7.3 million since the trust's listing.