Fortune Reit

Fortune Reit: 1H14 DPU rose 16%y/y to HK20.88¢ while distributable income rose 27.2% to HK$390.5m. Revenue was 33.5% higher at HK$813.5m, while NPI was 32.8% higher at HK$581m on strong rental reversions, good returns post AEIs, and additional income from Fortune Kingswood acquired in Oct’13. Aggregate leverage stood at 31.1% with all in cost of debt of 2.2%. Portfolio occupancy remained strong at 99.1%. For renewals in the period, a rental reversion of 21.2% was recorded. AEI in Belvedere Square is expected to start in 2H14 and completed by end 2015, with a target ROI of 15%. NAV stood at HK$11.01, translating to P/B of 0.7x. Annualized 1H14 yield is 5.8%.