Mall acquisitions lift Croesus' Q4 earnings

The trustee- manager for Croesus notes that the gross revenue for the previous year was lower as One's Mall (left) in Chiba in Japan, which was acquired in October 2014, contributed to turnover for only 81/2 months instead of a full year.
The trustee- manager for Croesus notes that the gross revenue for the previous year was lower as One's Mall (left) in Chiba in Japan, which was acquired in October 2014, contributed to turnover for only 81/2 months instead of a full year. PHOTO: CROESUS RETAIL TRUST

Trust reports robust growth as higher rents also contribute to 34.5% rise in gross revenue

New acquisitions and higher rents boosted figures for Croesus Retail Trust in the fourth quarter.

The mall operator, whose portfolio assets are in Japan, reported yesterday that gross revenue for the three months to June 30 rose 34.5 per cent to 2.68 billion yen (S$36.1 million).

Its trustee-manager said the increase was mainly due to the acquisition of Torius in October last year, and Fuji Grand Natalie in April and Mallage Saga and Feeeal Asahikawa in May this year.

"As Mallage Saga and Feeeal Asahikawa were completed in the middle of the quarter, the full benefits from these acquisitions will only be felt from the next quarter," it said, adding that despite the partial distributions from the malls, the trust continued to post robust growth.

Net property income rose 19.4 per cent from the same period a year ago to 1.44 billion yen on the back of a higher expense ratio in those new properties. Distributable income rose 21.9 per cent to 1.07 billion yen while distribution per unit (DPU) grew 6.9 per cent to 1.7 cents.

The trust's earnings are in yen and distributed in Singapore cents.

The firm said the higher results for distributable income compared to net property income were due to lower finance costs incurred on Japanese local bank debt issued in October last year and in May this year.

Gross revenue for the 12 months to June 30 rose 25.5 per cent to 9.58 billion yen. Besides the four new acquisitions, the boost also came from positive rental reversions from the tenant renewal exercise in Mallage Shobu.

  • AT A GLANCE

  • GROSS REVENUE:
    2.68 billion yen (+34.5%)

    NET PROPERTY INCOME:
    1.44 billion yen (+19.4%)

    DISTRIBUTION PER UNIT:
    1.7 cents (+6.9%)

The trustee-manager also noted the gross revenue for the year before was lower, as One's Mall in Chiba contributed to turnover for only 81/2 months rather than a full year, as it was acquired only in October 2014.

Full-year net property income increased 16.4 per cent to 5.45 billion yen, while distributable income was 18.5 per cent higher at 3.98 billion yen. DPU for the full year came in at 7.06 cents, 11.2 per cent higher than the restated DPU of 6.35 cents a year ago.

Mr Jim Chang, chief executive of the trustee-manager, Croesus Retail Asset Management, said in a statement: "We are in good stead to ride on Japan's negative interest rate environment, taking advantage of the favourable rates for our growth journey ahead."

He added that the trust will grow the portfolio through accretive acquisition, and also revamp existing properties, such as Torius and Feeeal Asahikawa, "to maximise their income-producing potential".

Croesus units closed down half a cent at 86 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on August 27, 2016, with the headline 'Mall acquisitions lift Croesus' Q4 earnings'. Print Edition | Subscribe