Macquarie MEAG Prime REIT (MMP REIT) has reported a full-year net income of S$76.8 million, boosted by a jump in its fourth-quarter earnings.
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The trust, which owns Ngee Ann City and Wisma Atria, said this is due to higher rentals, new leases and revenue from its acquisitions in Japan and China. Following the strong results, MMP REIT plans to distribute 6.19 cents per unit to its unit holders.
The revamp of the Wisma Atria shopping mall is paying off for MMP REIT.
Despite higher expenses from the installation of new escalators for the mall, net income for MMP REIT still grew to S$76.8 million in 2007.
In the fourth quarter, its net property income rose to S$22.2 million, up about 29 percent on-year.
Franklin Heng, CEO, Macquarie Pacific Star, said, "It's slightly above our expectations. The most surprising is actually the office sector. Towards the first half of last year, we were only doing an average of 7 to 8 dollars (psf/per month). But towards the last quarter of 2007, we've actually done an average of S$12 - slightly above S$12 dollars psf. And in fact, most recently, we've done the lease of close to about S$13.50. So going forward, we believe that (the) office (sector) will continue to underpin the strong performance."
The strong performance is clearly a boon for unit holders, who will receive 6.19 cents per unit.
MMP REIT has about S$60 million to be distributed in 2007, up 7.6 percent over the previous year.
For the fourth quarter, distributable income came in at S$16.2 million or 1.68 cents per unit.
This is 14.3 percent increase from the previous year.
Going forward, MMP REIT expects its major tenant Takashimaya at Ngee Ann City to pay 15 percent to 25 percent more rent in a new contract starting June.
On acquisitions, Macquarie said it is beginning to see good quality assets in Japan, Hong Kong and Singapore, and it is constantly reviewing proposals to find the right fit at the right price.
It is leaning towards retail due to its defensive qualities as office rents tend to be subject to cyclical changes.
Two other REITs also submitted their report cards on Wednesday.
Retail trust Suntec REIT reported a higher distribution income of S$33.5 million for its first quarter.
At 2.279 cents per unit, that is 16.1 percent higher than the previous year.
Fuelled by strong growth in tourism, CDL Hospitality Trust recorded a net income of some S$85.8 million for its first full-year earnings report.
That is 66 percent higher than its own projections.
The trust is distributing S$68.7 million of its income, or 8.98 cents per unit. - CNA/ms
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