Singapore-listed Hong Kong landlord Fortune Real Estate Investment Trust (Fortune REIT) (SGX:F25U) has reported robust growth in revenue and net property income for the three months ended 31 March 2013. Revenue and net property income are up by 16.3 percent and 17.6 percent to HK$301.4 million and HK$217.9 million respectively when compared to the corresponding quarter in 2012.

Fortune REIT remains cautiously optimistic in the near term due to slower growth in China.

Fortune REIT has attributed what it describes as a "stellar growth" to strong rental reversions, higher portfolio occupancy, and better returns from properties which have completed their respective asset enhancement initiatives.

Full-quarter income contributions from recently acquired Belvedere Square and Provident Square have also helped to plump up the numbers.

Consequently, income available for distribution stands at HK$153.3 million, up 16.3 percent from last year. DPU for the quarter jumps by 15.7 percent year-on-year to 9.00 HK cents, representing an annualized dividend yield of 5.3 percent.

Fortune REIT's balance sheet has positioned itself in good posture for growth. As at 31 March 2013, Fortune REIT’s balance sheet remains healthy with a gearing of 23.1% and available revolving credit facilities of HK$430 million. The interest cost for approximately 76 percent of Fortune REIT’s debt exposure has been hedged to fixed rates with the effective interest cost sustained at a low level of 2.76 percent.

However the REIT has maintained cautious optimism for growth prospects in the near term.

"Looking ahead, consumer sentiment in Hong Kong remains positive, but we are cautious about Hong Kong’s economic outlook given the unresolved Euro-zone debt crisis and the softening growth in China", said Mr. Anthony Ang, CEO for the Manager of Fortune REIT.

Fortune REIT holds a portfolio of sixteen retail properties in Hong Kong, comprising approximately 2.45 million square feet of retail space. Units of Fortune REIT are currently closed 2.35 percent higher from the previous trading day at S$7.83 on the SGX.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.