Fortune REIT hits record revenue and net property income

According to ARA Asset Management (Fortune) , manager of Fortune Real Estate Investment Trust,  Fortune REIT recorded impressive results for FY2012. During the reporting Year, total revenue and net property income increased by 22.5% and 22.8% year-on-year to HK$1,113.7 million and HK$788.3 million respectively.

ARA notes that this outstanding performance was attributable to the successful execution of its three core strategies. In particular, strong rental growth across the entire portfolio, coupled with remarkable return from the asset enhancement initiatives (“AEIs”) at Fortune City.

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One (“FCO”) and Ma On Shan Plaza (“MOSP”) contributed to 10.4% of the net property income growth. The additional income stream from Belvedere Square and Provident Square accounted for the remaining 12.4% of the net property income growth.

Income available for distribution increased 24.2% year-on-year to HK$549.5 million for FY2012. The DPU for the year was 32.35 HK cents and represents a distribution yield of 5.1%1 This higher DPU is attributable to better asset performance, prudent capital and cost management, and accretive acquisitions.

Solid performance despite the market challenges. Fortune REIT’s portfolio of private housing estates retail properties remained buoyant despite the moderation in overall retail sales in Hong Kong. Portfolio occupancy remained healthy at 97.7% as at 31 December 2012, despite frictional vacancies due to on- going AEIs at FCO and Jubilee Square. Rental reversion of 19.8% was recorded for lease renewals during the Reporting Year, representing one of the strongest increases since Fortune REIT’s establishment. Passing rent climbed to HK$32.0 per sq ft. Excluding the two new properties, passing rent for the original portfolio has improved by 8.3% year-on-year.