K-Reit's Q3 Distributable Income Up 31%

Source : The Business Times, October 11, 2007

Better occupancies and higher rentals lead to improved performance

K-REIT Asia yesterday said that its third-quarter income distributable to its unitholders rose 31.3 per cent to $5.4 million - from $4.1 million a year ago - as the trust benefited from higher rents in its properties

The better performance pushed the real estate investment trust's distribution per unit to 2.23 cents, up 30.4 per cent from the 1.71 cents paid out for the same three months last year.

Net property income increased 19.7 per cent to $7.5 million, from $6.3 million a year ago.

K-Reit attributed the improved performance to higher revenues as a result of better occupancies and higher rentals achieved for new and renewed leases.

'The portfolio attained 99.6 per cent committed occupancy as at end-September 2007 on the back of continued strong underlying demand for office space,' K-Reit said. 'Average gross rental rates reached $4.43 per square foot per month (psf pm) in September 2007, from $3.71 psf pm for the same period in 2006.'

Also in the third quarter, the trust announced its maiden acquisition since its listing in April 2006.

It said it will buy parent company Keppel Land's one-third stake in One Raffles Quay for $941.5 million. The acquisition will more than double K-Reit's portfolio to $1.8 billion.

The acquisition is subject to the approval of shareholders of both Keppel Land and K-Reit at their respective extraordinary general meetings, which will be held today. Keppel Land owns about 40 per cent of K-Reit.

Going forward, K-Reit will actively seek acquisitions of prime commercial properties in Singapore and other Asian growth cities to grow its portfolio size to a targeted $2 billion, it said.

The trust said that about 70 per cent of its portfolio's net lettable area is due for renewal between 2008 and 2010, which puts it in a good position to ride on the rising rental market, which is underpinned by strong demand and tight supply.

K-Reit's shares closed one cent down at $2.95 yesterday. The stock has climbed 18 per cent since the start of the year.

Related Link -
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K-Reit's news release

http://tinyurl.com/27evxr
Financialresults

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