Ascendas Reit's Q2 DPU up 2.3% on overseas acquisitions

Singapore

ASCENDAS Real Estate Investment Trust (Reit), which recorded a 2.3 per cent increase in distribution per unit (DPU) for the second quarter thanks to overseas acquisitions, said it will continue to diversify its portfolio for future growth.

DPU for the three months ended Sept 30, 2019 clocked 3.978 Singapore cents, versus 3.887 cents a year ago.

Gross revenue was up 5.3 per cent year on year to S$229.65 million on the back of a full quarter's contribution from the 38 logistics properties in the United Kingdom that were acquired between August and October 2018.

Net property income rose 12 per cent to S$177.94 million, in line with the higher gross revenue and the effects from the adoption of the new Singapore Financial Reporting Standard 116 (FRS 116) since April 1, 2019.

Income available for distribution was 2.9 per cent higher at S$106.97 million.

Portfolio occupancy rate was 91 per cent as at Sept 30, while the portfolio's weighted average lease expiry (WALE) worked out to four years. For leases renewed in Q2FY19, it saw positive rental reversion of 4 per cent.

William Tay, chief executive officer and executive director of the Reit's manager, said: "This quarter, our overseas acquisitions helped boost DPU by 2.3 per cent. We will continue to diversify our portfolio geographically to ensure resilience and future growth."

At end-September, the occupancy rate for its Singapore portfolio declined quarter-on-quarter to 88.1 per cent from 88.9 per cent previously, mainly due to some non-renewals at Logis Hub@Clementi, 31 International Business Park and Plaza 8 (Part of 1,3 & 5 Changi Business Park Crescent).

In Australia, its occupancy went up from 92.3 per cent to 95.4 per cent.

In the UK, its occupancy rate slid to 97.7 per cent from 100 per cent, owing to lower occupancies at Unit 5, Wellesbourne Distribution Park and Unit 13, Wellesbourne Distribution Park.

For the six months ended Sept 30, DPU edged up 1.2 per cent to 7.983 cents. Gross revenue was 5.7 per cent higher at S$459.32 million, while net property income rose 11.7 per cent to S$355.4 million. Income available for distribution increased 2 per cent to S$215.76 million.

About 3.1 per cent of Ascendas Reit's gross rental income will come up for renewal in the remaining quarter of FY19. Of the expiring leases, 1.1 per cent are from single-tenant buildings and 2 per cent are from multi-tenant buildings. It highlighted that its manager has been working on the renewal of leases coming due for expiry and marketing the vacant space to maximise returns from its portfolio.

Units in the Reit were halted from trading on Friday morning ahead of an acquisition announcement of 30 business park properties in the United States and Singapore.

The distribution will be paid out on Dec 3.

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