Armstrong- Notice book of closure

A final one-tier tax-exempt dividend of S$0.02 per ordinary share for the year ended 31 December 2010.
Record date - 18th May 2011
Payable date - 31st May 2011

Aims Amp Capital eyes more business parks to boost growth: Update

Singapore’s Aims Amp Capital Industrial Reit (AA Reit) (AART.SI) said it plans to increase the share of business park assets in its portfolio through acquisitions in order to benefit from higher rental income.

The trust, part-owned by Australian institutional real estate fund manager AMP Capital Investors (AMPGCH.UL), also aims to grow its portfolio by about $200 million, its chief executive officer Nicholas McGrath told Reuters in an interview.
“We have an increasing bias towards business parks and high-tech space,” said McGrath, a trained lawyer who moved to Singapore six years ago.

“We think rentals are likely to grow faster than in industries where margins may be under pressure and therefore the ability to afford higher rentals is under pressure”.

In the last 15 months, AA Reit bought about $300 million worth of assets and sold its sole Japanese property for 1.49 billion yen in order to focus its business on Singapore.

Currently, it has 26 properties in the city-state worth about $832.9 million and hopes to see business park assets account about 20-30% of its portfolio in about 3 years, McGrath said. They make up about 18% of its portfolio now.

The trust hopes to acquire more industrial properties that cater to higher-end manufacturing or high-technology businesses, as Singapore seeks to move away from low cost manufacturing activities.

“Singapore’s government policy as a whole is to move up the value chain...It is not the low cost manufacturer of products that it once was. Our strategy is very much aligned with where the market is moving,” said McGrath.

He added that he expects demand for business parks to increase faster than that for manufacturing facilities, which currently account for about 22% of AA Reit’s total portfolio.

Although AA Reit is one of the smallest amongst its peers with a market capitalisation of US$358 million ($452 million), it had a high distribution yield of 9.5%. This compares with an average of about 7% for Singapore-listed real estate investment trusts.

AA Reit is also looking at redeveloping and enhancing several of its warehouses, logistic and manufacturing facilities as they currently have underutilized plot ratios.

This would help the reit to boost its gross floor area and rental income, McGrath said.

AA Reit is also exploring acquiring properties in China or Australia, where its sponsors AMP Capital and AIMS Financial Group already have a presence.

“Over the next several years, call it a 5-year plan, we can be a reit that is well-diversified, not only across different asset classes within the general moniker of industrial, but also well diversified geographically,” McGrath said.

However, the trust has no immediate plans to buy assets in overseas markets due to the relatively high interest rates and low yields in Chinese and Australian markets, McGrath said.

Completion of Sale of Asahi Ohmiya Warehouse, Tokyo Japan (the “Property”)

Further to the previous announcements made by AIMS AMP Capital Industrial REIT Management Limited (the “Manager”) as Manager of AIMS AMP Capital Industrial REIT (‘Trust”), the Manager wishes to announce that the sale of the Trust’s effective 99.2% interest of the Property has been completed today.

A joint inspection of the Property by the purchaser, the Trust’s Japan asset manager and an independent engineer indicated JPY6.9 million (SGD107,619.45)1 of repairs were required on the Property following the earthquake.

Accordingly, the sale price has effectively been reduced from JPY1.49 billion to JPY1.483 billion.
The net sales proceeds will be used to repay debt, reducing the aggregate leverage of the
Trust to approximately 32.0%.

CIT rights issue timeline

18 March 2011 at 5.00 p.m.:Rights Issue Books Closure

23 March 2011: Despatch of Offer Information Statement (together with the
application forms) to Eligible Unitholders

23 March 2011 from 9.00 a.m: Commencement of trading of Rights Entitlements

31 March 2011 at 5.00 p.m: Close of trading of Rights Entitlements

6 April 2011 at 5.00 p.m: Last date and time for acceptance of the Rights Entitlements
and payment for Rights Units

15 April 2011 by 9.00 a.m: Expected date for crediting of the Rights Units
Commencement of trading of the Rights Units on the SGX‐ST

JPMorgan reverses its cautious call On S-REITS

JPMorgan says it’s reversing its cautious call on the Singapore REIT sector. It notes S-REITs have modestly underperformed the STI year to date, trading at 6.2% FY11E yield and 0.99X P/B.

“With the likely postponement of a number of equity fundraisings and the interest rate hike expectations in the current macro environment, we believe S-REITs sector should provide better risk-adjusted return given the strong yield support and stable growth.”

It says capital structure is stable; “Interest cover for all the REITs under our coverage remains at above three times even if we assume a 20% decline in renewal rents and 100bps increase in borrowing cost for debt to be renewed in 2011.”

The house’s top picks for the sector are CapitaMall Trust (C38U.SG) and Frasers Centrepoint Trust (J69U.SG), “a clear preference for the retail REITs.”

It adds, “our call is largely predicated on the fact that Singapore domestic economy, especially retail spending and tourism arrivals, will retain its existing growth rate despite the current macro environment.”

Combine value and yield strategy with S-REITS - CIMB

Amid the current volatile market, CIMB suggests combining a strategy of looking for value from oversold stocks and putting money into high-yield stocks.It notes, since the mega-earthquake and tsunami that hit Japan on March 11, “most SGX-listed stocks have taken a beating” with the STI Index down 3.6% since March 10 close. “which typically offer better dividend yields relative to the average stock,” and were not spared in the selloff. “Some REITs fell more than the STI over this period despite the lack of exposure to Japan. Stocks like Frasers Commercial Trust (ND8U.SG), down 7.3%, and Frasers Centrepoint Trust (J69U.SG), off 5.3%, are examples.

These stocks may be oversold, and as such, could present traders an opportunity for accumulation,” offering attractive CY11 yields of 7.8% and 6.0% respectively post the sell-down.

It adds, changes in travel plans may benefit tourism plays, like CDL Hospitality Trust (J85.SG), yielding 6.5%, which has fallen 4.4% since the quake.

S-REITs still a growth story - DBS Vickers

DBS Vickers says S-REITs’ 4Q10 results were “a continuation of the strong showing in 3Q10 with the sector reporting topline, net property income and distributable income growth of 10%, 13% and 11% respectively.”

It notes, hospitality REITs continued to outperform with strong organic growth, while acquisitions completed in 2010 lifted distributions for the remaining S-REITs.

“While retail and industrial S-REITs continue to deliver single digit growth, office REITs reported weaker results both on year and on quarter, as passing rents remained below the peak rents signed in 2007-2008. We expect this trend to continue in the coming quarters, only to reverse in 2012.”

The house adds, S-REITs are good inflation hedges given their ability to grow rental income above inflation. The house keeps its view that hospitality REITs will continue to exhibit the strongest earnings potential.

CDL Hospitality Trusts (J85.SG), rated buy with a $2.30 target, is its top pick, “to leverage on the robust growth from this sector.”

CDL Hospitality Trusts is +1.5% at $2.05.