ARA Logos posts 9% drop in Q3 DPU to S$0.01329 on enlarged unit base

ARA Logos Logistics Trust (K2LU) on Tuesday posted a 9 per cent drop in distribution per unit (DPU) to S$0.01329 for its third quarter ended Sept 30, 2021, from S$0.01461 the year before.

This was mainly due to an enlarged unit base after raising equity for its maiden Australian portfolio acquisition in April this year, the real estate investment trust's (Reit) manager said in a press statement.

Gross revenue rose 15.1 per cent to S$34 million for Q3, from S$29.5 million the year prior, while net property income (NPI) was up 13.9 per cent on the year to S$26.1 million, from S$22.9 million.

The growth in gross revenue and NPI was underpinned by a rise in revenue from the acquisition of the Australian portfolio, the commencement of new leases in the quarter and a relatively stronger Australian dollar in Q3 2021 versus Q3 2020.

The increase was partially offset by the divestment of Kidman Park in Australia and ALog Changi DistriCentre 2 in Singapore in May and June 2021 respectively.

Meanwhile, distributable income rose 20.9 per cent to S$19.3 million, from S$16 million the year before, on higher NPI and contributions from the Reit's investments in the New LAIVS Trust and Oxford Property Fund.

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The distribution of 1.329 Singapore cents per unit will be paid on Nov 26, after books closure on Nov 3.

For its portfolio, ARA Logos secured and renewed more than 171,000 square metres of leases in the year-to-date, with a positive rental reversion rate of 3.2 per cent. Its portfolio occupancy stood at 97.6 per cent, while its weighted average lease expiry by gross rental income was at 4.6 years.

Karen Lee, chief executive of the manager, said the portfolio's occupancy would have improved to 98.6 per cent following the signing of a new lease commitment, which will be effective from October 2021.

"This steady set of performance has reaffirmed our positive outlook towards the resiliency of the logistics sector, supported by long-term structural shifts in areas such as e-commerce and supply chain," she added. 

Earlier this month, ARA Logos proposed a merger with ESR-Reit to create ESR-Logos Reit. If completed, the merged Reit is expected to be among the top 10 largest S-Reits by free-float market capitalisation.

The counter was S$0.885 flat when trading on Oct 26 ended.

READ MORE: 

• Ara Logos-ESR-Reit merger NAV dilutive at first but may mitigate decline over time: ESR
• ARA Logos minorities may support merger with ESR-Reit, but not because it's a good deal
• ARA Logos unitholders must weigh pure-play logistics status against being part of a larger entity
• Analysts recommend ARA Logos unitholders accept ESR-Reit offer