Business Times – 22 Apr 2008
This was attributed mainly to income from its stake in One Raffles Quay By ARTHUR SIM K-REIT Asia has reported distributable income of $11.4 million for the quarter ended March 31, a 165.9 per cent increase from the same period in 2007.
This was attributed mainly to income from its one-third interest in One Raffles Quay Pte Ltd, the acquisition of which was completed on Dec 10, 2007.
K-Reit said the contribution from One Raffles Quay was $10.9 million, comprising income support received from the vendor, interest income and dividend income.
Distribution per unit (DPU) for the quarter was 4.6 cents, or 1.3 percentage points more than forecast. K-Reit said this amount will be included in the advance distribution payout, estimated to be 6.45 to 6.5 cents per unit, for the period Jan 1 to May 7, 2008.
Net property income for the quarter was $9.1 million, or 41.5 per cent higher than $6.5 million in the corresponding quarter in 2007. This was underpinned by higher gross rental income from properties, K-Reit said. Gross rental income increased 30.2 per cent year on year to $11.2 million in Q1 2008.
Committed occupancy of K-Reit’s portfolio is 99.6 per cent. With the contribution of the one-third interest in One Raffles Quay, the average monthly gross rent of its portfolio grew 69.4 per cent year on year and 14 per cent from end-2007 to $6.86 per square foot in March 2008.
K-Reit is now engaged in a rights issue. The expected gross proceeds of $551.7 million will be used to partly repay a bridging loan of $942 million drawn down for the acquisition of the one-third stake in One Raffles Quay.
This will reduce K-Reit’s aggregate leverage from 53.9 per cent to 27.7 per cent and provide it with additional funding capacity to acquire further properties.
The rights units are expected to be issued on May 8.
K-Reit said it expects to benefit from positive rental revisions, given its current rents are below market rates and that 42.2 per cent and 20.2 per cent of its portfolio’s net lettable area is due for lease expiry and rent review respectively between 2008 and 2010.
K-Reit’s units closed one cent higher at $1.41 yesterday.