Fortune REIT

Fortune REIT: 1Q14 DPU was HK$0.10 distributable income rose 26.5% to HK$193.9m while revenue and NPI rose 34% and 32.7% respectively to HK$403.9m and HK$289.2m respectively. Increased revenue was attributed to income contribution from Fortune Kingswood acquired in Oct’13, strong rental reversions, and strong returns post AEIs. Portfolio occupancy was 99.3%. Aggregate leverage stood at 32.9% with effective interest cost at 2.22%. StanChart expects Fortune to continue to deliver sound rental growth, with near-full occupancy, strong reversions and good returns from AEIs. NAV stood at HK$10.24, translating to P/B of 0.6x. Annualized 1Q14 yield is 6.4% StanChart maintains O/PF with TP HK$7.50