Page 16 - Forterra

14 ANNUAL REPORT 2012
TRUSTEE-MANAGER’S REPORT
OVERVIEW
Forterra is an owner, manager and developer of quality
commercial real estate in China with its focus on
Shanghai, the largest commercial and economic region
in the country.
With a diverse portfolio comprising office, retail and
logistic park real estate represented by stabilized income-
producing assets, redevelopment projects and green
field sites, Forterra strives to deliver optimum returns to
Unitholders through a mixture of recurrent lease rental
income and accretive net asset value through proactive
management of its development assets.
Gross revenue for the Trust registered a year-on-year
increase of 6.3% reflecting the full year contributions
from Huai Hai Mall and Central Park Mall for the first time
since their acquisitions part way through 2011 and Beijing
Logistics Park, fully leased upon completion and income
producing in the 2nd half of 2012.
Detracting from full year revenue was the progressive
closure of the retail podium at The HQ during the
2nd half of 2012, ahead of the commencement of the
refurbishment program, owing to the early termination
of the Parkson tenancy five months ahead of schedule.
This was quickly followed by the balance of the podium
witnessing occupancy of just 10.3% as at year end from
90.9% as at 30 June 2012. (Note: The HQ retail podium
was 100% vacant as at 31 January 2013).
The early departure of Parkson’s (and other retail
podium tenants) was a proactive undertaking of
management to allow an early commencement of the
refurbishment process, now well underway.
With respect to other aspects of the 2012 gross revenue,
leasing activity generally was a strong contributor to the
year-on-year increase, whereupon a total of 93 office
tenancies were negotiated reflecting an average increase
in contracted rental income of 23.2% on a net effective
basis. This leasing activity encompassed over 130,000
square metres of office space of which 59 tenants
renewed expiring leases including 15 negotiations for
expansion space and 19 new tenants were introduced to
the portfolio across 2012.
NEW/RENEW LEASES SUMMARY OF 2012
PERIOD NO. OF LEASES
SIGNED
AVERAGE RENTAL UPLIFT
ON NET EFFECTIVE BASIS
Q1 2012 28 27.2%
Q2 2012 28 22.2%
Q3 2012 15 26.1%
Q4 2012 22 18.7%
93 23.2%
Forterra Real Estate Pte Ltd is the Trustee-Manager of Forterra and executes
this function in accordance with the Trust Deed established and executed on 19
May 2010 and Supplemental Trust Deed dated 26 February 2013. In this capacity,
Forterra Real Estate Pte. Ltd has created one of the leading players in China’s
burgeoning commercial real estate sector.
Central Plaza, Shanghai Huai Hai Mall, Shanghai Beijing Logistics Park, Beijing