First-quarter earnings at ARA Asset Management up on higher management fees

Reit management fees at ARA Asset Management was boosted by Cache Logistics Trust’s acquisition of three Australian properties in the fourth quarter last year.
Reit management fees at ARA Asset Management was boosted by Cache Logistics Trust’s acquisition of three Australian properties in the fourth quarter last year. PHOTO: ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED

SINGAPORE - First-quarter earnings at ARA Asset Management inched up on higher fees from managing real estate investment trusts (Reits) and portfolios.

Net profit came in at $19.4 million in the three months to March 31, up 2 per cent compared with the same period a year ago. Total revenue rose 10 per cent to $41.4 million.

After taking into account one-off adjustments however, net profit jumped 10 per cent compared with last year, ARA noted.

Management fees gained 14 per cent to $34.3 million.

This was due to stronger Reit management fees following asset enhancements initiatives.

Reit management fees were also boosted by Suntec Reit's acquisition of three floors of strata office space at Suntec Tower Two, and Cache Logistics Trust's acquisition of three Australian properties in the fourth quarter last year.

Portfolio management and service fees grew 48 per cent.

This was due to higher management fees from the ARA China Investment Partners, LLC after the acquisition of two commercial properties in China in September and December last year.

The launch of the ARA Harmony Fund III and the ARA Harmony Fund V in the second half of last year also contributed to greater fees.

Real estate management fees grew 19 per cent, mainly due to higher property management fees.

ARA group chief executive Mr John Lim said: "I'm happy to report the increase in our recurrent management fees received across all business segments for the quarter. The group is actively evaluating investment opportunities in Australia, South Korea and China for its various funds."

Finance income surged 142 per cent and other income shot up 128 per cent. However, acquisition, divestment and performance fees plunged 67 per cent.

Earnings per share for the quarter came in at 1.94 cents, down from the restated amount of 2.19 cents last year. Net asset value per share stood at 54.42 cents as at March 31, higher than the 52.17 cents as at Dec 31 last year.

The group's total assets under management stood at approximately $28.9 billion as at March 31.

The group said that in spite of sector headwinds, the performance of the office and retail portfolios under management is expected to be stable for the year.

The development of 177 Pacific Highway in North Sydney held by Suntec Reit is progressing "well within schedule" and is expected to complete in the second half of 2016, it added.