Saizen REIT

Saizen REIT: 2HFY14 DPU came in at 3.1¢ (-1.6% y/y), while distributable income was flattish at $8.8m, on weakening of JPY against S$. 4QFY14 gross revenue increased 3.4% to $12.1m, while NPI rose 2.6% to $8.3m, mainly from the 7 properties acquired over the course of FY13, offset by the divestment of 1 property in FY14. Average occupancy stood at 91%. Aggregate leverage stood 37%, with interest for 88% of its loans fixed. While rental reversions were marginally lower at 0.5% from previous contracted rates, management is optimistic that rental reflation will gradually filter through the entire Japan. The divestment of Saumur Meinohama II, was done at 19% premium over valuation. Following that in July, Sun Port 6 was divested at 12.8% premium over valuation NAV at end Jun was $1.22, translating to 0.8x P/B. Annualized 2HFY14 is 6.5%