Perennial

Perennial - Latest update was its qtrly results 2 wks back, where 1Q13 results were in-line, with distributable income coming in 2.7% higher at $10.9m and DPU of 0.95¢, translating to an annualized yield of 6%. As there was no revenue, income was mainly derived from the drawdown under the new Rmb226.5m earn-out deed for unitholders. Net profit was $5m compared to $1.8m the previous year. During the period, PCRT secured a second master lease tenant from Guangcai International, an antique wholesaler for the West Wing of its Shenyang Red Star Macalline Furniture Mall, taking up 33% of the mall’s net lettable area. Together with existing master tenant Red Star Macalline furniture operator at the East Wing, the mall’s occupancy is expected to reach 93% when Guangcai commences operations in 3Q13, providing rental stability. Shenyang Longemont Asia Pacific City is expected to enjoy increased shopper traffic with the completion of several new developments in the vicinity including two hotels (due to open in 2Q13 to 3Q13) and the first block of the Longemont Edifice Residences (handing over to owners in 2Q13). Meantime, the Shenyang City’s Long Distance Bus Interchange has completed its relocation to the transportation hub, strategically located next to PCRT’s Shenyang assets. At Perennial Jihua Mall in Foshan, leasing continued to strengthen with occupancy reaching 77%. New tenants secured include Daiso, Disney, China Mobile, Bread n Butter, Saturday and Breadtalk. The mall is targeted to open with more than 90% occupancy in 3Q13. Perennial Qingyang Mall in Chengdu continued to push ahead on the leasing front with leasing commitment increasing to 63%. New tenants secured include H&M, C&A, Hush Puppies and Haagen-Dazs. The mall is on track to commence operations by 1Q14. At current price, the China-based retail trust trades at 11.2% discount to its NAV of $0.71 with a low leverage of 0.23x