Elite Commercial Reit posts 26.6% lower Q1 DPU
Wu Xinyi
ELITE Commercial Reit posted a 26.6 per cent fall in distribution per unit (DPU) to 0.94 pence for the first quarter of FY2023, from 1.28 pence in the previous corresponding period.
This was attributed mainly to higher borrowing costs, lower revenue from vacancies and an enlarged equity base, said the real estate investment trust’s (Reit) manager on Thursday (Apr 27).
Revenue for the quarter slipped 0.4 per cent year on year to £9.2 million (S$15.3 million).
Distributable income fell 26.1 per cent to £4.5 million for Q1, from £6.1 million.
The UK-focused Reit’s portfolio occupancy stood at 97.9 per cent as at Mar 31, 2023, down from full occupancy as at end-March 2022. For the portfolio’s 12 vacant and vacating assets, the manager said it is considering potential alternative uses, such as re-letting as an office space, among other strategies.
Its gearing ratio stood at 46.6 per cent as at Mar 31, up from 42.8 per cent as at end-March 2022.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“Prudent capital and balance sheet management will go hand-in-hand with our overall business strategy in bringing our gearing to a more comfortable level, even as we continue to have our sights on potential opportunities for growth,” said Shaldine Wang, chief executive of the Reit’s manager.
The manager noted that its assets remain stable in terms of income profile, as it has consistently collected rent in advance.
The manager expects the recent rent escalation review to help mitigate increased borrowing costs from interest rate hikes and offset the impact of reduced rent contribution from vacant and vacating assets.
SEE ALSO
Based on a review of 136 of the Reit’s 155 assets, 134 assets have their rent escalation pegged to the UK Consumer Price Index.
The recently revised rent per annum of £36 million, which came into effect on Apr 1 this year, represents a net annualised rent escalation of 13.1 per cent compared with the rent per annum of £31.8 million as at end-March 2023.
Units of the Reit closed 3.8 per cent or £0.015 lower at £0.385 on Wednesday.
Copyright SPH Media. All rights reserved.
