KREIT

KREIT: posted 2Q10 net property income (NPI) +49% yoy to S$18.4m and distributable income +26% to $22m, on new contributions from purchase of 50% stake in 275 George Street in Brisbane early 2010, and additional 29% interest in S'pore Prudential Tower. However, DPU fell 38% to 1.64c (~5.4% annualized yield) as the unit base expanded due to $620m rights issue in Nov'09. Mgt believes that the SG office mkt is likely to have "passed the trough" and has seen occupancy rise to 97.9% vs 96% QoQ…

Separately, co announced that it has acquired an 18 storey office and retail space at 77 King Street in Sydney for A$120m (S$145m). Annual rents are ~A$570psm (lower end of mkt rates), but come with NPI guarantee of up to A$4m for 6yrs, on top of fixed annual rental escalations. KREIT will fund the purchase with equity from its rights issue and debt. Its aggregate leverage at end-Jun'10 was 15.2%, and is expected to rise to 20.4% on completion of the deal.