MACARTHURCOOK Industrial Reit (MI-Reit) has announced a distribution per unit (DPU) of 1.51 cents for its first quarter ended June 30, down 36 per cent from a year ago.
Higher borrowing cost was one factor for the fall. Borrowing costs were higher because of the increase in interest margins and facility fees when the repayment date of the Reit’s Singapore term loan facility was extended to Dec 31, 2009 during the quarter.
Net property income for Q1 was $9.3 million, 3.2 per cent higher year-on-year, as the portfolio’s high occupancy was maintained.
The Reit said organic rental growth was supported by built-in rental escalations staggered throughout the leases of 19 of the properties.
In FY2010, seven properties are scheduled to experience 5 per cent rental increases and three properties will see rental increases of 3.25 per cent, 3 per cent and 1.5 per cent.
With the higher cost of borrowing, the income available for distribution in FY2010 will be lower than in FY2009, the Reit said. ‘However, barring any further unforeseen events, the manager expects rental income to remain stable.’
Source : Business Times – 8 Aug 2009
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