MP Reit raises rent by 19.75% at Ngee Ann City

Source : Business Times - 17 Jun 2008

MACQUARIE Prime Real Estate Investment Trust (MP Reit) said yesterday that it has raised rent by 19.75 per cent for about 226,000 square feet of retail space in Ngee Ann City.

The Orchard Road space, of which Toshin Development is master lessee, is occupied by luxury retailers such as Louis Vuitton and Chanel, as well as brand name retailers.

MP Reit - formerly known as Macquarie MEAG Prime Reit (MMP Reit) - said that this is expected to push annualised DPU (distribution per unit) up by 7.2 per cent, based on an annualised DPU of 7.08 cents for the first quarter of 2008.

The rental increase for a period of three years starting on June 8 came after a review with Toshin, which is wholly owned by departmental store operator Takashimaya.

‘The announcement is above our estimates of 15 per cent and is largely positive for the Reit given its positive impact on earnings,’ DBS Vickers said in a research note.

The broking house raised its DPU estimates to 7.54 cents for the financial year 2008, translating to a DPU yield of about 6.7 per cent based on yesterday’s closing price of $1.13.

DBS Vickers also upped its DPU estimates for financial year 2009 to 7.81 cents.

The lease under Toshin contributed to a quarter of the Reit’s portfolio gross rent, as at end-March this year.

But the broking house lowered its target price to $1.61 from $1.63 to account for ‘a higher risk-free rate of 3.9 per cent against (its) previous estimate of 3 per cent’.

MP Reit holds a 27.23 per cent strata title interest in Ngee Ann City, comprising 256,000 sq ft in retail net lettable area and 141,000 sq ft in office net lettable space.

The 30,000 square feet of retail area that is not covered by the Toshin master lease is directly rented out and managed by the Reit.

MP Reit’s portfolio consists of 10 properties that are worth more than $2 billion.

Takashimaya hit by 20% rent hike for Ngee Ann City space

Source : Straits Times - 17 Jun 2008

TAKASHIMAYA Co is paying nearly a fifth more in rent to renew its tenancy at Ngee Ann City for the next three years.

The new rent, effective from June 8, for 226,000 sq ft of retail space in the heart of Orchard Road, is 19.75 per cent higher than what the Japanese retailer paid previously.

The revision is expected to account for a 7.2 per cent rise in annualised distribution per unit for owners of Macquarie Prime Real Estate Investment Trust (MP Reit).

As at end-March, this master lease with Takashimaya - negotiated through its subsidiary Toshin Development - made up about a quarter of MP Reit’s portfolio gross rent.

The Reit has a 27.2 per cent stake in Ngee Ann City, which is made up of 256,000 sq ft of net lettable retail space and 141,000 sq ft of net lettable office area.

Apart from Takashimaya Shopping Centre, the area under the master lease is also occupied by luxury retailers like Louis Vuitton, Chanel, Piaget and Burberry. Other brand-name retailers include Guess, Zara and Max Mara.

Mr Franklin Heng, chief executive of Macquarie Pacific Star, which manages the Reit, said the rental hike reflected Ngee Ann City’s premium location and quality.

‘Our master lease with Toshin is a valuable contributor to MP Reit’s performance, as it provides long-term income stability as well as the potential for rental upside every three years.’

Takashimaya Singapore, a unit of Takashimaya Co, has enjoyed strong sales.

Its most recent filing with the Accounting and Corporate Regulatory Authority showed a 23 per cent rise in after-tax profit to $28.7 million in 2006. Its results for last year are not yet publicly available.

MP Reit shares yesterday ended three cents lower at $1.13.

MP REIT secures nearly 20% rent rise for 226,000sf of Ngee Ann City space

Source : Channel NewsAsia - 16 Jun 2008

Macquarie Prime Real Estate Investment Trust (MP REIT) has secured 19.75 percent higher rent from its tenant Toshin Development.

But when contacted, MP REIT declined to reveal details of the rent, saying it is confidential.

Toshin is the master lessee for about 226,000 square feet of retail space in Ngee Ann City.

The new rent will be locked in for three years from June 8 this year.

MP REIT says this is expected to account for a 7.2% increase in its annualised distribution per unit.

As at 31 March 2008, the Toshin master lease made up a quarter of the gross rent of MP REIT’s portfolio.

MP REIT owns about 27 percent of the strata title interest in Ngee Ann City, comprising 256,000 square feet of retail net lettable area and 141,000 square feet in office net lettable area.

The Toshin area is occupied by luxury retailers such as Louis Vuitton, Chanel, Piaget and Burberry. - CNA/ir