K-REIT Asia says it achieved a distributable income of $70.5 million for the full-year Jan 1 to Dec 31 2009 (FY2009).

This was 21.2% higher than that for the same period in 2008, due mainly to higher rental rates achieved for new and renewed leases and income contribution from one-third interest in One Raffles Quay Pte Ltd.

Net property income rose 23.2% year-on-year to $48.9 million in FY2009, due mainly to positive rental reversions and contribution from the additional six strata floors of Prudential Tower, which were acquired in November 2009. The average gross monthly rent of K-REIT Asia’s portfolio, including K-REIT Asia’s one-third interest in One Raffles Quay, was 7.2% higher at $8.16 psf in December 2009 compared with $7.61 psf in December 2008.

Distribution Per Unit (DPU) for 2009 was 5.28 cents compared with 4.41 cents in 2008 which has been restated to take into account the effect of the one-for-one rights issue completed in November 2009 and computed based on the enlarged unit base of approximately 1.3 billion units.

For the period from July 1 to Dec 31 2009, K-REIT Asia will pay out 2.77 cents per unit on Feb 25 2010 based on 100% of its taxable income available for distribution to unitholders. This will bring the total DPU pay-out to 7.76 cents for the period from Jan 1 to Dec 31 2009.

In November 2009, K-REIT Asia successfully completed a one-for-one rights issue at $0.93 per unit and raised gross proceeds of approximately $620 million. The rights issue has provided K-REIT Asia with additional funding capacity to pursue acquisition growth.

Some $99.7 million of the rights proceeds has been used to repay a bridging loan facility for the purpose of financing the acquisition of the six strata floors of Prudential Tower.

After the repayment of the bridging loan, K-REIT Asia’s aggregate leverage was 27.7% as at end-December 2009.

K-REIT Asia says is well-positioned to capitalise on the recovery of the Singapore economy with its high- quality asset portfolio, strong tenancy profile and diverse tenant business mix. The weighted average lease term for K-REIT Asia’s portfolio is 5.2 years while that of its top 10 tenants is 6.7 years, providing income stability for unitholders.

The acquisition of additional six strata floors of Prudential Tower in November 2009 marked K-REIT Asia’s first third-party acquisition. The acquisition has raised K-REIT Asia’s stake from approximately 44.4% to a majority control of approximately 73.4% of the total strata area of the building. The majority control will put K-REIT Asia in a stronger position to manage the income generated from this asset. The acquisition has enlarged K-REIT Asia’s portfolio NLA by 5.5% to 1.3m sf as at end-2009. As at end-Dec 2009, K-REIT Asia’s portfolio size is $2.1 billion. On an average psf basis, portfolio valuation has fallen by 5.3% to $1,616 psf from a year ago, which is at the lower end of market valuation for prime office space.

Going forward, with the enhanced financial flexibility from the rights issue, K-REIT Asia intends to pursue opportunities for strategic acquisitions in Singapore and other Asian growth cities. It will continue to identify potential asset enhancement initiatives for its property portfolio to maximise rental income, and to place emphasis on attracting creditworthy new tenants, retaining good existing tenants and improving operational and cost efficiencies.