Fortune Reit: FY11 results in line.
NPI reached HK$632m, +8% yoy.
DPU was +8% yoy to HK 26.3cts.
The growth was mainly attributable to positive rental reversion and strong increase in income contribution from Fortune City One (FCO) and Ma On Shan Plaza (MOSP) after AEI phase completion. The remaining phases of FCO AEI are expected to be completed by end 2012, with target ROI of 15% for a total capex of HK$100m.
Overall the portfolio showed stable growth where avg portfolio passing rent went up 12.2% yoy to HK$32.2 psf with occupancy improving to 97% at end 4Q11, from 93.5% at end 3Q11.
Balance sheet remains healthy with gearing lowered to 18.8% due to increase in invmt properties value.
The Reit’s previous proposal to acquire the Belvedere Garden Property in Tsuen Wan and Provident Centre Proeprty in North Point for HK$1.9b was approved unitholders. Mgt expects to complete th acquisition before end-Mar and see immediate yield accretion.
BOA-ML maintains Neutral, lifts TP to HK$4.40.
Goldman keeps at Neutral, raises TP to HK$4.20 from HK$4.
JPM keeps at Overweight, raises TP from HK$4.45 to HK$4.88.
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