Fortune Reit posts higher first half DPU of 26.34 HK cents

POSITIVE rental reversions gave a fillip to Fortune Real Estate Investment Trust's (Reit) first half results, with the Hong Kong-based trust on Friday announcing a 3.2 per cent rise in its distribution per unit (DPU) for the six months ended June 30, 2018 to 26.34 HK cents, up from 25.53 HK cents in the same period a year ago.

Unitholders will get their share of the payout on Aug 29, 2018.

For the reporting period, the Reit saw a 2.2 per cent rise in revenue to HK$978.1 million (S$169.69 million), while net property income was lifted 3 per cent to HK$748.6 million.

The positive rental reversions were offset by the divestment of Provident Square, which Fortune Reit successfully completed on Feb 28, 2018 for HK$2 billion. Out of that number, HK$1.1 billion has been applied for early repayment of a bank loan due 2019, which Fortune Reit said has reduced its gearing and "eliminated refinancing needs" until 2020.

Total property operating expenses - excluding the manager's performance fee - inched downward by 0.5 per cent year-on-year to HK$206.2 million.

Meanwhile, Fortune Reit's gearing ratio and aggregate leverage stood at 22.3 per cent, compared to 27.4 per cent as at Dec 31, 2017, a result of higher property valuation and a lower borrowing level.

Fortune Reit holds a portfolio of 16 retail properties in Hong Kong, comprising some three million square feet of retail space  and 2,713 car parking lots, with Fortune City One, Fortune Kingswood, Ma On Shan Plaza and Tsing Yi Square among the retail properties.

The Reit's counter last closed at S$1.66 on Thursday.