The recent acquisitions made by K-Reit Asia have boosted its financial results for the first quarter of 2010.
K-Reit has reported a net property income of $13.9 million, up 28 percent from the previous year. The increase was attributed by more rental income from the 50 percent stake share in 275 George Street in Brisbane, which it acquired early this year, and from the six strata floors in Prudential Tower, which it purchased late last year.
The distributable income to unitholders also increased to $17.8 million in Q1, 14 percent higher than in Q1 last year.
Its distribution per unit (DPU) for the first quarter was 1.33 cents, or 5.39 cents on an annualised basis. K-Reit’s annualized distribution yield was 4.9 percent based on its closing unit of $1.10 on 31 March 2010.
The DPU for the first quarter dropped 44 percent from the 2.38 cents the previous year as the unit base expanded from a $620-million rights issue in November.
A number of performance indicators for K-Reit had also improved in the past year. Its average gross rental rate increased to $8.30 from $8.06 over the same period. The portfolio occupancy rate as of end-March was 96 percent, up from 95.5 percent year-on-year.
The leverage ratio declined to 25.2 percent at the end of first quarter, from 27.7 percent on the previous quarter. It is expected to fall further to 15.2 percent this month when K-Reit uses some proceeds from the rights issue to partially repay a revolving term loan.
As of end-March, its portfolio size was $2.3 billion, up from $2.1 billion at end-December 2009 due to several acquisitions. As the office sector stabilizes and business sentiments improve, it is looking at further growth for this year.
K-Reit said that it “intends to pursue opportunities for strategic acquisitions in Singapore and across Asia.” It will also identify potential asset enhancement initiatives for its properties.