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capital structure. A-REIT issued a
total of S$275m fixed rate notes
in April and July 2009 as part of
the S$1bn multi-currency Medium
Term Note program established
on 20 March 2009 to diversify its
sources of funding.
In addition, it raised new equity of
approximately S$301.6m (issue price
was above NAV and at a 6.8%
discount to the adjusted volume
weighted average price of the
market day immediately prior to the
launch) in August 2009 to fund the
development of 38A Kim Chuan
Road and the acquisitions of DBS
Asia Hub and 31 Joo Koon Circle.
In March 2010, in view of the
significant refinancing requirements
within the S-REIT sector in 2012, the
Manager strategically embarked
on an early redemption of A-REIT’s
Commercial Mortgage Backed
Securities (“CMBS”) of €165m
(S$350m) due in May 2012. The early
redemption was at a discount to par
and was partly refinanced with a new
7-year Exchangeable Collateralised
Securities (“ECS”) issue of S$300m
with a put option in 2015 and a
coupon rate of 1.6% p.a. The ECS is
convertible to ordinary A-REIT units
at S$2.45 per unit, which is over 50%
above the current NAV.
Consequently, the weighted average diversified our sources of funding,
term to maturity of A-REIT’s debt and contained our cost of borrowing.
portfolio has increased from 2.2 years We will continue to strike a balance
a year ago to 4.0 years as at
between certainty in our capital
31 March 2010. Aggregate leverage structure and the cost of capital, in
was 31.6% as at 31 March 2010 with order to achieve optimal returns for
100% of A-REIT’s total debt hedged our Unitholders.
into fixed rate for the next 3.1 years.
Though we have observed an
Enduring Value 3: A Resilient
easing of credit spreads in the past Portfolio Performance
financial year compared to FY08/09, As at 31 March 2010, A-REIT’s
they are, nevertheless, still higher overall portfolio occupancy stands
than pre-crisis levels. Weighted at a healthy 95.7% after taking into
average interest cost increased from account a net increase of about
3.67% to 3.94% in FY09/10.
94,000 sqm (4.2%) of new space;
occupancy for multi-tenanted
The proactive management of buildings is 91.2%. The portfolio
A-REIT’s capital structure has
continues to enjoy positive rental
strengthened our balance sheet, reversion in renewal rates across
Throughout this difficult period,
A-REIT remained focused on its
core strategies, but re-calibrated its
approach to adapt to the changing
market conditions. This has produced
a commendable set of financial results
for the year.
8th Annual Report FY09/10
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