REIT Financial News - 19 APR 2010: Quarterly Earnings Report for K-REIT

First quarter 2010 results for K-REIT:

• Press Release
• Financial Statements
• Presentation Slides

Key Points

• Net property income increased 28.4% year-on-year to $13.9 million, due mainly to higher rental income.
• Distributable income rose by 13.8% year-on-year due mainly to higher net property income and contribution from One Raffles Quay Pte Ltd. 
• DPU for January to March 2010 amounted to 1.33 cents.
• Portfolio committed occupancy of 96.0% as at 31 March 2010 is higher than Core CBD occupancy of 91.9%. 
• Aggregate leverage lowered to 25.2% as at 31 March 2010 on enlarged asset base. 
• Acquisition of 275 George Street in Brisbane, Australia enlarged portfolio asset size to $2.3 billion and net lettable area to 1.5 million square feet.

Author's Note
There will be no distribution payment this quarter as K-Reit distributes semi-annually. The DPU of 1.33 cents will be paid in the next quarter together with the DPU for the next quarter.

Base on the latest closing price of 1.130 for K-Reit on Apr 19, the annualized yield for the DPU of 1.33 cents is 4.7%. This is relatively lower than the other office Reits. But the gearing of the Reit is low at 25.2%, and the new Australian property has only contributed 1 month of rental revenue for the quarter. The cash flow statement in the latest quarterly report also shows that the Reit still has about S$340.3 million of cash and cash equivalent mainly from its rights issue last year that has yet to be deployed.