1Q 08 Results - Released 17 July 2008
http://info.sgx.com/webcoranncatth.nsf/ ... penelementKey Highlights• 1QFY2008/09 DPU of 3.89 cents, up 15.4% year-on-year (yoy); 5.4% quarter-on-quarter
• 1Q FY2008/09 net income available for distribution of $51.8 m, up 15.9% yoy
• Portfolio occupancy at 98.6% on 30 June 2008 vs 97.2% at 30 June 2007. Occupancy for MTB properties was 96.8% vs 95.0% a year ago.
• Acquired 31 International Business Park and 8 Loyang Way 1 for a total of $271.8 million
• Total assets of $4.5 bn as at 30 June 2008 compared to $3.3bn as at 30 June 2007
• Aggregate Leverage at 40.5%
Organic Growth – Rental Rate Improvements• Built-in Rental Growth
• 50% of A-REIT’s portfolio by value are results of sale-&-leaseback which are typically long term leases
• Incorporates stepped annual rental increment, providing growth in earnings
• Over 63% (by total gross revenue pa) of such leases are incorporated with a fixed percentage stepped up rental while 34.2% of the leases (by total gross revenue pa) are pegged to CPI
• Positive Rental Reversion
• The other 50% of A-REIT’s portfolio are multi-tenanted buildings where rental rates are marked to market at renewal
• Business & Science Parks and Hi-Tech Industrial properties registered 69.3% and 44.4% respectively in renewal rates over preceding contract rates
Outlook for Industrial Property MarketOutlook for Science & Business Parks and Hi-tech Industrial sectors continue to be healthy
• Limited new supply in the next two years.
• Expect to achieve positive organic reversion albeit at a lower rate.
• 68% of science and business park sector & 61% of hi-tech industrial sector are on short term leases which could benefit of positive rental reversions
• Outlook for light industrial sector moderate
• New supply in next 2 years is not significant compared to logistics sector. New supply are either own-occupied development or intended for strata title sale
• Rental growth rate is expected to be in line with traditional sector performance
• 83% of portfolio are long term committed leases
• Outlook for logistics sector subdued
• Significant new supply of about 604,000 sqm expected for the next two years
• New demand rental rates may be dampened
• However, 73% of lease in this sector are long term committed leases
• Obsolete stock being redeveloped will mitigate the supply situation