A-REIT reported a 10.9% growth in gross revenue contributed by the larger portfolio base from a year ago. However, net property income increased by a smaller extent of 8.2% due to higher operating expenses as well as the cessation of land rent rebates granted by the govt in 2009. Occupancy rate for the portfolio has remained stable at 95.6%, higher than mkt avg while rental reversion on lease renewal continued to be positive for the Business & Science Parks and Hi-Tech industrial properties.
The Trust has an average term of debt maturity of 3.5 years and a well balanced debt maturity profile such that only about 39.7% of its total debts outstanding are due for refinancing over the next three years until 2013. As at 30 June 2010, A-REIT’s aggregate leverage was 34.1% with a weighted average cost of funding of 3.93%. All of A-REIT’s floating interest rate exposure is fixed for the next 2.9 years.
A-REIT is currently developing a partial built-to-suit business park facility in Changi Business Park for Citibank N.A. Upon completion expected in 4Q FY2010/11, Citibank N.A. will lease at least 50% of the building for a period of 6 years with annual rental escalation and option to renew for two further terms of 3 years each. For the balance of FY2010/11, about 11.8% of A-REIT’s revenue is due for renewal. Based on last closing price of $2.0, A-REIT still offers decent yield of about 6.9%.
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