Vacancy levels rise in Macquarie property trust
The Macquarie DDR Trust has released its results for the half year to December 31, 2008, with management remaining “cautious” in the face of increasing vacancy rates.
The trust reported core earnings of $41.8 million, compared to $46.1 million for the period to December 31, 2007. Net operating income was US$68.8 million – a 3.8 per cent decrease on the prior corresponding period due to asset sales and increased vacancy levels, the group said.
The trust’s portfolio had a leased rate of 91.2 per cent at December 31, 2008, but following the lease rejection of US company Mervyns in January 2009, the leased rate fell to 84.1 per cent.
The group is undertaking a review of the portfolio with the aim of “maximising unit holder value” through asset sales and the renegotiation and extension of debt terms.
The trust has US$148 million of debt maturing in June this year, secured by 18 assets.
More than half of the trust’s properties were re-priced in the six months to December 31, 2008, resulting in an 8.9 per cent decrease in asset values.
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