Fortune REIT finishes strong in 3Q, revenue income up by 23.5%

The Singapore-listed trust's net property income also grew by 24.5% to HK$444.5 million for the first nine months of 2010 as improved economic conditions revive interest in acquiring properties.

Fortune REIT’s revenue income stands at K$619.5 million while distributable income consequently grew by 23.8% to HK$300.8 million.

"Our portfolio continued to deliver strong and sustainable growth following the first half results… Fortune REIT's proactive leasing efforts resulted in occupancy rate reaching 98.0%, surpassing the previous high set in the first quarter. Rental reversion remained strong at 10.5%," said Anthony Ang, Chief Executive Officer of ARA Asset Management Limited, the Manager of Fortune REIT.

"With local consumption continuing to strengthen, Hong Kong retail sales registered 13 consecutive months of year-on-year increases from September 2009 to September 2010. The latest figures for the first 9 months of 2010 saw the value of Hong Kong retail sales increased by 17.9% over the same period a year ago. As local consumer sentiment remained firm on the back of rising income, better job prospects and recovery in the stock market, this will give fresh impetus to the performance of Fortune REIT's portfolio,” Ang added.

The portfolio occupancy rate climbed to a new high of 98.0% since Fortune REIT was founded in 2003. Eight of fourteen properties were fully occupied, with five other malls achieved higher quarter-on-quarter occupancies. As most of the properties are close to or at full occupancy, the Manager will focus on the leasing and tenant repositioning strategy going into 2011, particularly at Ma On Shan Plaza and The Metropolis Mall, where around 50% of the tenants will be up for renewal.

Tenants have also started moving in to the newly renovated Ngan Shing Commercial Center (NSCC) from September 2010 onwards. Committed occupancy for NSCC was 100% as at 30 September 2010, which effectively boosted the committed occupancy for City One Shatin Property to 98.6% (current occupancy: 93.2%). The two ParknShops (formerly one ParknShop at each side of NSCC and City One Plaza ("COP")) have now merged into a new ParknShop Superstore at NSCC and becomes the only supermarket serving over 10,000 households in City One Shatin. Not only does it offer more variety of goods to City One Shatin's residents, it also brings substantial footfall to NSCC. The former ParknShop space at COP is now being subdivided for higher paying tenants.

"The successful completion of renovation at NSCC has paved a solid foundation for the next phase of AEIs to be embarked at the other side of the property - COP. This will become one of our highlight projects in 2011 and an important revenue growth driver going forward. In addition, the Manager will continue to prudently seek for acquisition opportunities that bring long term benefits to Fortune REIT's unitholders," concluded Justina Chiu, Deputy Chief Executive Officer of the Manager.

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