Investa Office Fund (ASX:IOF)
today announces its results for the half year to 31 December 2013 with Statutory Net Profit of $56.0 million, up 4.3% on the previous corresponding period (pcp). After adjusting for fair value adjustments and other non-operating items, Funds From Operations1 (FFO) were up 7.9% to $84.5 million mainly due to full period contributions from acquisitions.
Key highlights for the period include:
- FFO per unit up from 1 cent to 13.8 cents;
- Distributions per unit up 5.7% to 9.25 cents, 0.5 cents higher than pcp;
- Look-through gearing (total debt to total assets) reduced to 23.8% following receipt of offshore asset sale proceeds; and
- NTA per unit up 1 cent to $3.24 after $45 million of uplifts in Australian valuations were largely offset by the fair value loss on sale of IOF’s investment in the Dutch Office Fund (DOF).
Post period end IOF issued a US$200m US Private Placement (“USPP”), raising 11, 13 and 15 year debt at an average of 173bps over US Treasuries.
Toby Phelps, Fund Manager IOF said: “Our focus on transitioning to an Australian only portfolio and delivering attractive risk adjusted returns from high quality assets continues to bear fruit. Recent acquisitions are performing well and we are leveraging Investa’s expertise in leasing to drive growth in FFO. Notwithstanding a challenging tenant demand environment, we’re on track for a record leasing year, with 83,000sqm already leased and a further 35,000sqm in Heads of Agreement. A proactive approach to capital management has seen the average debt maturity being extended to 7 years, one of the longest in the sector, while our cost of debt continues to fall.”