Elite Commercial Reit posts Q1 DPU of 0.74 pence, 1.4% above forecast

ELITE Commercial Reit's distribution per unit (DPU) stood at 0.74 pence for the first quarter ended March 31, 2020, 1.4 per cent higher than its initial public offering (IPO) forecast of 0.73 pence, according to its financial results released on Monday.

Revenue was £3.52 million (S$6.18 million) for the quarter, up 0.7 per cent from an IPO forecast of £3.5 million. Net property income for the quarter totalled £3.4 million.

Income available for distribution to unitholders amounted to £2.46 million, 1.4 per cent above the forecast £2.42 million.

The real estate investment trust (Reit) and its subsidiaries remain well capitalised, with adequate working capital and debt headroom to meet its ongoing obligations, the manager said.

The Reit has also received three months of advanced rent for the period April 1 to June 30, with 92.8 per cent received on or before the due date and 99.4 per cent received within seven days of the due date.

The manager said the group's 97 assets are predominantly leased to the UK government's Secretary of State for Housing, Communities and Local Government, with the Department for Work and Pensions (DWP) as the primary occupier. Meanwhile, 82.5 per cent of the assets in the Reit's initial portfolio is used by the DWP to provide key front-of-house services, primarily Jobcentre Plus unemployment services.

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While the public is discouraged from visiting the Jobcentre Plus after the UK government announced a lockdown in March 2020 to curb the spread of the novel coronavirus, the premises remain open to process and disburse benefits to claimants.

The manager said the group expects to provide a stable income to investors as over 99 per cent of its rental income is derived from full repairing and insuring (triple net) leases from the UK government. Moreover, the Covid-19 situation does not trigger force majeure or termination clauses of the group's leases with the government.

Units of Elite Commercial Reit were trading flat at 67.5 pence as at 9.25am on Monday.