KUALA LUMPUR (Feb 16): Amanahraya Real Estate Investment Trust (Amanahraya REIT) recorded a distribution per unit (DPU) of 1.8 sen for the fourth quarter of financial year ended Dec 31, 2014 (4QFY14), up 3.45% from 1.74 sen paid out in 4QFY13, after recognising an unrealised income of RM64.79 million from an increase in fair value of its investment properties during the quarter under review.

In a filing to Bursa this evening, the trust (fundamental: 0.7; valuation: 3), however, noted that its realised income after tax fell 5.5% to RM8.41 million in 4QFY14 compared to RM8.9 million in 4QFY13, with gross revenue increasing by a marginal 0.29% to RM13.958 million compared to RM13.998 million in 4QFY13.

"The trust's property expenses incurred for the current quarter was significantly higher in comparison to the preceding quarter partly due to the increase in quit rent and assessment rate for properties located in Kuala Lumpur. In addition, the trust had also incurred agency fee for tenancy of Wisma ARB Semantan (Wisma Amanah Raya Jalan Semantan) amounting to RM597,000," it noted.

The REIT's filing to Bursa also showed that its full FY14 DPU, however, dipped 10.5% to 6.5 sen compared to 7.26 sen last year.

Full year (FY14) realised income also slumped 24.4% to RM31.93 million compared to RM42.25 million, while revenue slumped 14.1% to RM55.23 million compared to RM64.27 million.

Amanahraya REIT noted that its rental income in FY14 was down 14%, mainly due to the vacant Wisma Wisma ARB Semantan from Jan 27, 2014 to Sept 2, 2014.
 
"The property, however, was occupied since Sept 3, 2014 and the tenant enjoyed rent-free period until Jan 2, 2015. Other than this, rental income for Silver Bird Factory was not recognised in 2014 due to unlikelihood of payment by the tenant," it said.

The company also noted that total cumulative property expenses in FY14 was RM3.23 million, up 55.28% compared to RM2.08 million in the previous corresponding period, due to increases in assessment and quit rent as well as property management fees.

On the other hand, total non-property expenses for the period was RM23.37 million in comparison to the preceding corresponding period's RM21.96 million due to increase in manager's, valuation and agency fees for the tenancy of Wisma ARB Semantan.

The company also noted that for FY14, the fund had recorded an increase in fair value of its investment properties (unrealised gain) amounting to RM75.32 million.

Net income before tax, inclusive of unrealised gain, was RM107.25 million compared to RM24.25 million in the previous corresponding period.

The fund noted that it is continuously ensuring that its existing assets are well maintained to ensure the stability of its rental income, and that it benefits from capital appreciations.

Apart from that, the fund is also actively identifying good assets for new acquisition to continuously improve the yield and further diversify the portfolio to minimise the sectoral risk.

"The strategy of having assets with long-term leases by reputable lessees shall continue to be the focus of Amanahraya REIT to ensure sustainable return," it added.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)