Fortune REIT eyes buying of new properties

Fortune Real Estate Investment Trust (0778) plans to buy new properties as one of its growth strategies and declared no financing demand after its distributable amount decreased last year due to rising finance costs.

Total distributable amount dropped 7.6 percent to HK$810.6 million in 2023 as finance costs surged 45.3 percent amid the high-interest rate environment. The distribution per unit fell by 8.5 percent to 40.38 HK cents. The final dividend decreased 14.6 percent to 18.02 HK cents, leading to a 9.1 percent yield rate, based on its unit price of HK$4.45 yesterday.

Net property income inched up by 0.7 percent to HK$1.3 billion, and revenue advanced by 1.2 percent.

The average occupancy rate was 94.4 percent in 2023, with a portfolio of 16 private housing estate retail properties in Hong Kong and one mall in Singapore.

With the surging finance costs, its gearing ratio rose 0.7 percentage points to 24.6 percent last year, and approximately 62 percent of total debt has been hedged to fixed rate.

Chief executive Justina Chiu Yu said the company has a revolving loan and cash of HK$800 million, without any need for financing. The trust will actively look for acquisition projects this year in Hong Kong, Singapore and the Greater Bay Area