• Successfully acquired new assets worth S$37.1 million, supported by a S$40.0 million Private Placement in August 2010.
• Reduced gearing from 42.3% to 39.2%, following loan prepayment of S$32.0 million. Further repayment is planned.
• Improved financial flexibility with a new three-year Acquisition Term Loan and Revolving Credit Facility totalling S$70.0 million.
• Delivered distributable income in 3Q2010 of S$10.8 million, which translated to a distribution per unit (“DPU”) of 1.187 cents.
• Successfully completed an asset enhancement
Overview of 3Q2010 Financial Results
| 3Q2010 (S$m) | 2Q2010 (S$m) | Q-o-Q Incr /(Decr)% | 3Q2009 (S$m) | Y-o-Y Incr / (Decr) % | |
| Gross Revenue | 18.2 | 18.3 | -0.5 | 18.7 | -2.6 |
| Net Property Income | 15.9 | 16.1 | -0.9 | 16.4 | 2.6 |
| Distributable Income | 10.8 | 10.8 | (-) | 11.2 | -3.6 |
| DPU (cents) | 1.187 | 1.238 | -4.1 | 1.344 | -11.7 |
| Annualised DPU (cents) | 4.709 | 4.966 | -5.2 | 5.332 | -11.7 |
Property Portfolio
The carrying value of the property portfolio increased by S$7.3 million during the quarter to S$838.5 million as at 30 September 2010, mainly as a result of the acquisition of 22 Chin Bee Drive, less divestments during the period.
The Trust’s underlying property fundamentals have remained resilient, with 3Q2010 portfolio occupancy maintained at almost 100%, a weighted average lease expiry of 4.1 years and continued low arrears trending at around 0.7% of annualised rent. The 3Q2010 occupancy rate for CIT of 99.97%, remains higher than the national average of 92.3%1.
In line with the Manager’s strategy of implementing value-adding asset enhancement initiatives (“AEI”) for the Trust, a S$1.6 million AEI at 1 Third Lok Yang Road/4 Fourth Lok Yang Road for the tenant, YCH DistriPark, was completed in July 2010.
This resulted in a NPI yield of 20.0%. There are three other AEIs in the pipeline which are expected to yield between 10%-16%. A number of leases have also been re-structured to facilitate these AEIs, which, in turn enable the Manager to maximise the properties’ plot ratios, and enhance capital values.
Distribution Reinvestment Plan
Given that a cash distribution of 0.68 cents per unit for the period 1 July 2010 to 22 August 2010 was paid to Unitholders in September 2010, the Manager has determined that the DRP will not apply to the remainder of 3Q2010.
Outlook
Singapore’s economy expanded by 17.9% on an annualised basis in the first half of 2010.
The Ministry of Trade and Industry has maintained the GDP growth forecast at 13.0% to 15.0% for 20102. This improvement in macro economic conditions has positively impacted the industrial real estate sector, evidenced by recent URA’s statistics. Property prices and rentals for multiple-user factory space increased by 5.7% and 1.3% respectively in 2Q20103.
”While recent economic data has illustrated the pace of growth has slowed from 1H2010, the Manager remains optimistic that the industrial real estate market will steadily improve in 2H2010 based on the existing sectors demand and supply fundamentals,” said Mr. Calvert.
| Event | Important Dates |
| Distribution Period | 1 July 2010 to 30 September 2010 |
Distribution Rate | |
| 1 July 2010 to 22 August 2010 | 0.680 cents per unit (paid on 16 Sept 2010) |
| 23 August 2010 to 30 Sept 2010 | 0.507 cents per unit |
Last Day of Trading on “Cum” Basis | Monday, 25 October 2010 |
Ex-date | Tuesday, 26 October 2010 |
Books Closure Date | Thursday, 28 October 2010 |
Distribution Payment Date (1) | Tuesday, 30 November 201 |
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