ARA Asset Management's net profit for Q4 up by 41%

Higher fees from managing real estate investment trusts (Reits) and investment portfolios boosted fourth-quarter earnings at ARA Asset Management.

Net profit shot up 41 per cent to $25.56 million in the three months to Dec 31 while total revenue rose 7 per cent to $46.15 million.

But earnings for the year fell 11 per cent to $78.06 million as total turnover dropped 10 per cent to $156.03 million.

While management fees rose during the year, the company recorded sharp drops in acquisition, divestment and performance fees, finance income and other income.

Management fees for Reits accounted for 56 per cent of revenue for the year, real estate services chipped in 14 per cent and portfolio management a further 13 per cent. The rest was made up of fees from acquisition, divestment and performance as well as finance and other income.

  • AT A GLANCE

  • NET PROFIT

    $25.6 million (+41%)

  • TOTAL REVENUE

    $46.2 million (+7%)

  • DIVIDEND

    2.7 cents per share (unchanged)

Total assets under management rose 11.9 per cent over the year to $29.8 billion as at Dec 31, driven by ARA Private Funds and the Reits division. Quarterly earnings per share rose to 2.88 cents from 2.10 cents a year earlier, while net asset value was 52.17 cents at Dec 31, up from 40.37 cents a year earlier.

A final dividend of 2.7 cents per share was declared, the same as the previous year.

ARA Asset Management group chief executive John Lim said the year was good despite external challenges. During the quarter, the Reits under its management concluded several acquisitions. Suntec Reit bought three floors of strata office space in Suntec Tower Two in November while Cache Logistics Trust acquired three Australian properties, ending the year with a total of six properties in the country.

After the divestment of Park Mall by Suntec Reit, the firm established the ARA Harmony Fund V in December to redevelop the property. It now manages 10 private real estate funds.

ARA shares closed up 1.5 cents to $1.04 yesterday. Its results were released after markets closed.

A version of this article appeared in the print edition of The Straits Times on February 05, 2016, with the headline 'ARA Asset Management's net profit for Q4 up by 41%'. Print Edition | Subscribe