Ascendas Reit Q3 DPU down 12.3% on enlarged base following rights issue

Singapore

ASCENDAS Reit's distribution per unit (DPU) for its third quarter fell 12.3 per cent to 3.507 Singapore cents due to an enlarged number of units in issue after a rights issue in December last year.

Gross revenue for the quarter under review rose 5.9 per cent from a year earlier to S$239.73 million, bolstered by contributions from 28 properties in the US and two properties in Singapore acquired in December last year.

Net property income increased 8.5 per cent to S$182.28 million, owing to the effects of adopting accounting standard FRS 116. Land rent expenses of S$8.2 million was recorded in Q3FY18/19 but none were recorded in Q3FY19.

Amount available for distribution edged up 2.1 per cent to S$126.93 million, in line with the increase in net property income. The DPU for the three months ended Dec 31 will be paid on March 4.

During FY2019, Ascendas Reit acquired 31 properties across the US, Singapore and Australia for a total cost of S$1.77 billion, lifting the total investment properties under management to S$12.84 billion. As at end-December, its portfolio comprised 200 properties. Its overall portfolio occupancy rate held steady at 90.9 per cent at end-December, compared to 91 per cent as at end-September.

For the quarter under review, it achieved positive portfolio rental reversion of 8.8 per cent for renewed leases in multi-tenant buildings, which works out to positive rental reversion of 6 per cent for FY19. The portfolio's weighted average lease expiry (WALE) stood at 3.9 years, and about 19.4 per cent of Ascendas Reit's gross rental income will be due for renewal in FY20.

William Tay, chief executive of the Reit's manager, said: "We will continue to invest in well-located properties that benefit from structural growth trends such as technology and e-commerce, and strengthen Ascendas Reit's presence across its four developed markets to optimise portfolio returns."

On Jan 23, the Reit completed the sale of Wisma Gulab, a high-specifications building at 190 Macpherson Road, to Heap Seng Group for S$88 million. This was 5.5 per cent higher than the book value of S$83.4 million.

It said that the divestment of the light industrial building located at No 202 Kallang Bahru to a joint venture of Catalist-listed LHN for S$17 million is expected to be completed in the first quarter of this year. The sale price is 13.3 per cent higher than its book price of S$15 million.

Ascendas Reit said: "The proceeds from the divestments may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs, and/

or make distributions to unitholders."

As at end-December, its aggregate leverage fell to 35.1 per cent from 36.2 per cent as at Sept 30.

Ascendas Reit units closed three cents higher at S$3.15 on Friday before the announcement.