ARA Asset Management

ARA Asset Management: 4Q13 net profit increased 25% y/y to $22.1m while total revenue climbed 19% to $43.8m, mainly due to a jump in acquisition fees to $11.8m from a low base, in relation to fees received from Fortune REIT’s acquisition of Kingswood and Suntec REIT’s progress payment of the 177-199 Pacific Highway property in North Sydney. This was offset by a 70% fall in finance income to $2m. AUM grew 13% to $25.5b. Total expenses increased to $18.6m (+5.7%) mainly on fair value losses on financial instruments. Management expects overall macroeconomic environment to remain uncertain, but expects FY14 performance to be comparable with FY13. On the REIT front, the abovementioned North Sydney acquisition plus ongoing AEIs in Suntec City will be key drivers in FY2014. Prosperity REIT had also announced the acquisition of 9 Chong Yip Street in Hong Kong. On the Private Funds front, ARA had also acquired Macquarie Real Estate Korea Limited to give itself a foodhold in the South Korean real estate market. NAV as at end Dec was 32.84¢. At yesterday’s closing price, P/B was 5.3x. Final DPS of 2.7¢ announced, bringing full year DPS to 5¢ (maintained), implying yield of 2.9%