ARA Asset Management to further delay China reit, posts 2% growth in Q3 profit

Asset manager ARA Asset Management will likely delay any potential listing of a real estate investment trust in China for at least 12 months from now, group chief executive officer John Lim said on Tuesday.

He told a results briefing over the phone that market conditions were not right yet and noted that ARA would generally focus on continuing to grow its existing reits to capitalise on economies of scale rather than set up new reits.

However, he added that if ARA were to set up any new reits it could be in other countries such as China, Korea, Australia or Japan.

Mr Lim's remarks came as ARA posted a 2 per cent rise in third-quarter net profit to $20 million year-on-year.

Total revenue for the three months to Sept 30 stayed flat at $33.1 million from the preceding year.

The company said reit management fees increased in the quarter because asset refurbishments and enhancements led to higher property valuations.

ARA established a long-term partnership with Straits Trading Company in October this year. Mr Lim said that Straits Trading's portfolio was unlikely to be spun off into a reit but "there will be many ways to increase returns" for Straits Trading shareholders.

The group's earnings per share fell to 2.37 cents in the quarter from 2.56 cents in the preceding year. Net asset value also dropped to 30.71 cents as at Sept 30, down from 31.80 cents as at Dec 31.

Its share price climbed four cents to close at $1.84 on Tuesday.