Ascott Reit's DPU up 9% to 1.28 Singapore cents for Q1

ASCOTT Residence Trust (Ascott Reit) saw distribution per unit (DPU) rise 9 per cent to 1.28 Singapore cents for the first quarter ended March 31, after adjustment for one-off items, in results released on Wednesday.

This was up from the restated DPU of 1.17 Singapore cents in the same period a year before, following a rights issue in April 2017.

The gain came as unitholders' distribution rose 16 per cent to S$29.2 million (see amendment note). This was on the back of contributions from acquisitions in 2017 and a realised exchange gain of S$1.6 million arising from proceeds from the divestment of two serviced residences in Shanghai and Xian in China, as well as the repayment of foreign currency bank loans with the divestment proceeds.

For Q1, Ascott Reit's gross revenue edged up 1 per cent to S$112.8 million, while gross profit rose 3 per cent to S$48.7 million.

Said Ascott Residence Trust Management Limited chairman Bob Tan: "Ascott Reit's four acquisitions in Singapore, Frankfurt, Hamburg and New York last year continue to contribute to higher gross profit."

Half of gross profit was contributed by stable income from master leases and serviced residences on management contracts with minimum guaranteed income, and the rest by growth income through management contract, he added.

Ascott Reit has 73 properties in 37 cities across 14 countries.

Noting that the US Federal Reserve raised interest rates in March 2018, with two more hikes expected this year, Ascott said that it would continue to monitor and maintain its interest rate and exchange rate exposure. About 86 per cent of its total borrowings are on fixed interest rates and discussions have commenced with banks to refinance the debts due in 2018 ahead of their maturity dates.

Ascott Reit units finished down one Singapore cent or 0.88 per cent at S$1.13 on Tuesday, before the Q1 results were released.

Amendment note:

An earlier version of this story incorrectly said that unitholders' distribution rose 16 per cent to S$28.2 million. It was in fact S$29.2 million. The article above has been revised to reflect this.