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Sandy Li

Yuexiu Real Estate Investment Trust reported a record net profit last year and believes its income would continue to grow as solid demand for quality buildings will drive up rents.
Net profit jumped 77.1 per cent year on year to 927.96 million yuan (HK$1.17 billion) for the year to December, while revenue jumped 14.6 per cent to 1.57 billion yuan.
Total distribution rose 10.7 per cent year on year to 662.71 million yuan, or 29.86 HK cents per unit. That represents a distribution yield of 7.3 per cent based on the closing share price of HK$4.09 yesterday.
"It is the highest distribution per unit since our listing in 2005," said Lin Deliang, executive director and chief executive of Yuexiu reit.
The company holds six commercial projects composed of 680,970 square metres of grade-A office, retail, serviced apartments and hotel rooms in Guangzhou.
He said average monthly office rents at its flagship development, Guangzhou International Finance Centre, was 227 yuan per square metre which was the highest in the area.
More than a third of leases at the centre, due for renewal this year, are at the low to mid-floor level which go for 170 to 200 yuan per square metre per month, Lin said.
"The new rents should be higher than what these leases were signed for three or four years ago," he said.
Last year, the centre contributed 61 per cent of the firm's 1.57 billion yuan revenue and saw its gross rentals climb 19 per cent from 2013.
Chairman Liu Yongjie said Yuexiu reit would further expand beyond Guangzhou through acquisitions or asset injections by its parent, Yuexiu Property.
"We are looking at quality investment properties in Beijing and Shanghai," he said.
"Rentals at our existing investment properties still have ample room for further growth."
The number of shoppers visiting its shopping mall, Victory Plaza, jumped to 600,000 from 200,000 a month after the Japanese fast fashion house Uniqlo opened its first 10,000 sq metre flagship store. The occupancy rate at Victory Plaza reached 99.4 per cent and rental unit price grew 27.4 per cent last year.


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Office rental

Yuexiu reit reaps record profit as Guangzhou office rents set to rise

Yuexiu's Guangzhou International Finance Centre contributed 61 per cent of the firm's 1.57 billion yuan revenue. Photo: SCMP Pictures

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