SINGAPORE (Jan 23): The manager of Fortune REIT has reported FY17 DPU of 50.78 HK cents (8.57 cents), 3.1% higher than a year ago.
This comprises an interim and final DPU of 25.53 HK cents and 25.25 HK cents respectively.
ARA Asset Management (Fortune) says FY17 total revenue and net property income rose by 2.8% and 3.3% year-on-year to HK$2.03 billion and HK$1.46 billion respectively. This was due to higher occupancy and healthy rental reversion across the portfolio.
Total property operating expenses for FY17 excluding the manager’s performance fee increased by 1.2% to HK$528.3 million on successful efforts to reduce electricity consumption during the reporting year.
Cost-to-revenue ratio improved further to 26.0% from 26.4%.
Income available for distribution for FY17 was HK$970.8 million, representing a year-on-year increase of 3.8%.
As at Dec 31, 2017, total committed loan facilities amounted to HK$11.2 billion. Gearing ratio and aggregate leverage decreased to 27.4% from 29.5% as a result of a higher property valuation.
As at Dec 31 2017, Fortune REIT’s portfolio of 17 retail properties was appraised at HK$38.8 billion. The higher valuation resulted in a revaluation gain of HK$2.39 billion for the reporting year.
In its outlook, ARA Asset Management (Fortune) says the Hong Kong economy continued to expand notably by 3.6% year-on-year in the third quarter of 2017, following the 4.1% growth in the first half of the year.
Private consumption also briskly expanded by 6.7% year-on-year in the third quarter while stronger economic growth supported steady local consumption demand while the revival of inbound tourism has further boosted the retail market.
"We will continue to build on the strong foundation of our portfolio, execute an effective leasing strategy, add value to our malls through AEIs and trade mix optimisation, seek yield-accretive investment opportunities and maintain a healthy capital structure," says the manager.
Units in Fortune REIT closed 10 cents higher at HK$9.85 on Tuesday.
