Glonghui, Feb. 22 | Morgan Stanley released a report stating that due to rising operating expenses and financial costs of Guanjun Real Estate Trust, the company's distribution per fund unit (DPU) fell 14% year-on-year to HK$0.17 last year, 4% lower than the bank's expectations. The dividend payout ratio was maintained at 90%. The bank mentioned that current rent for Guanjun's No. 3 Garden Road office has dropped 8% year-on-year to HK$92 per square foot, while Langham Place has remained stable. The bank believes that Guanjun's interest expenses have not peaked, and the company's debt due this year reached HK$5.2 billion. Damo said there was a structural decline in its allocations per unit. The bank lowered its forecast of allocations per fund unit by 13% and 19% for the current year and next two years, and expects the distribution per fund unit to drop 7% year-on-year this year. This is the fifth consecutive year of decline, mainly due to weak office prospects and rising interest expenses. The target price for Guanjun was lowered from HK$2.4 to HK$1.8, maintaining a “reduced holdings” rating.