The manager of Fortune Real Estate Investment Trust (Fortune Reit) expects a double-digit increase in rental income after leases for about 40 per cent of its shopping centres' rentable area expire this year. Rent increases will be supported by strong local demand and the company's asset upgrade programmes, according to ARA Asset Management (Fortune) deputy chief executive officer Justina Chiu Yu. Leasing contracts expiring in the first quarter have been renewed and the company is in talks with tenants whose contracts end in April and May, she said. Fortune Reit, controlled by developer Cheung Kong (Holdings), on Friday announced that revenues rose 18.3 per cent last year to HK$1.32 billion while net property income increased 17.8 per cent to HK$928.3 million. The results factor in the contribution of Fortune Kingswood in Tin Shui Wai, an acquisition which was completed in October. The reit reported a 20.4 per cent rental renewal rate last year. The distribution per unit amounted to 36 HK cents each, representing a distribution yield of 5.8 per cent. Chiu said the company would continue its upgrade of projects, including HK$80 million for the Belvedere Square Phase 3 mall in Tsuen Wan this year. Fortune Reit has 17 private housing estate retail properties in Hong Kong, comprising 3.11 million square feet of retail space and parking spaces for 2,606 cars. Its portfolio is valued at HK$29.3 billion. On the government's proposal to give Hong Kong-listed reits greater flexibility to undertake development projects, Justin Chiu Kwok-hung, chairman of Fortune Reit, said it would add an element of risk for investors. Some of the city's reits have, however, backed the plan. Chiu said the property market is not only facing market risks but also policy risks such as property curbs. Allowing reits to develop properties would be risky, he said, explaining his opposition.