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Saizen Reit trims DPU by 8.7% to 2.83 Singapore cents

SAIZEN Real Estate Investment Trust (Reit) is cutting its interim distribution per unit by 8.7 per cent to 2.83 Singapore cents on the back of a weaker Japanese yen and a higher number of issued units.

Total return attributable to unitholders fell 19.2 per cent to 369.4 million yen (S$4.6 million) in the second fiscal quarter ended December 2015 as net property income slipped 0.5 per cent to 682.7 million yen, said the manager of the Japanese residential Reit.

For the six-month period, total return attributable to unitholders dropped 35.8 per cent to 573.5 million yen as net property income shed 0.8 per cent to 1.4 billion yen.

After adjusting for non-cash items and cash payments, distributable income generated during the first six months of fiscal 2016 was flat at 725.3 million yen. Saizen distributes at least 90 per cent of its income available for distribution.

The proposed first-half distribution is separate from a S$1.056 per unit special distribution for which shareholders' approval is currently being sought. That special distribution is part of a planned disposal of the Reit's entire portfolio in Japan.

The average occupancy rate was 91.2 per cent in the second fiscal quarter, up from 90.0 per cent a year ago.

Rental reversions slipped by about 1.7 per cent in the second quarter from previous contracted rates, mostly due to the acceptance of a substantially lower rate on a commercial contract in Sapporo that had been vacant since 2009.