Fortune Reit: 1H10 results. Net property income, distributable income both up 27% yoy to HK$392m / $205m, due to contribution from 3 new properties acquired in Oct 09, as well as overall increase in occupancy (96.2% vs 92.1% yoy) and rental rates for its 11 existing properties. Although DPU -37% yoy to HK12.27cts, due to enlarged unit base following rights issue in Oct 09 to finance the new properties...
Stock looks attractive on a longer term horizon. Offers 6.9% annualized yield, and trades at 38% discount to NAV/unit of HK$5.70. Value of invmt properties remain robust, +7% yoy. Strong balance sheet with HK$515m cash + HK$255m available credit facility, gives it firepower to take advantage of future acquisition opportunities that may arise. Continued AEI should further boost returns on existing properties. While strong retail sales growth provides positive backdrop for portfolio of suburban retail properties.
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