This article is from the Australian Property Journal archive
ALE Property Group has increased interim distributions by 17.9% and forecasts an increase in full year distributions, by borrowing more money.
ALE announced a first half-year distributable profit of $14.8 million from $14.4 million in the previous corresponding period. Revenue grew from $27.4 million to $28 million.
A distribution of 9.90 cents per security was announced, up from 8.40cps.
Managing director Andrew Wilkinson said there were several significant influences on distributable profit during the half year to December 2015.
“Property income increased due to the annual CPI based rental escalations.
“Borrowing expenses were lower due to lower average debt balances and the full impact of the reduced credit margins arising from the June 2014 refinancing.
“The outlook for both the 2018 and 2028 rent reviews remains positive given the increase in ALH’s operating profitability across a large number of ALE’s properties.
“Current expectation is for the portfolio’s rents to increase at the November 2018 rent review with increases for each property capped and collared at 10%. The EBITDAR levels for each property in the years leading up to 2018 will be an important factor in the final determination,” he added.
Meanwhile Wilkinson said there is increasing engagement between ALE and ALH to identify opportunities to monetise or develop underutilised parts of 970,000 sqm of total land area to further to enhance portfolio returns.
During the half year, gearing reduced from 48.0% to 45.7%. However Wilkinson said ALE was aiming to progressively move gearing back towards the target range of between 50% and 55%, by increasing FY16 distribution to at least 20 cps comprising and is considering additional distributions following completion of 2018 rent review.
Australian Property Journal
