ESR-Logos Reit Q1 net property income up 78.2% to S$70.4 million
Bryan Kow
ESR-LOGOS Reit ‘s net property income (NPI) rose 78.2 per cent year on year to S$70.4 million for the first quarter of FY2023. It also posted a 63.9 per cent increase in gross revenue at S$97.7 million.
The higher gross revenue and NPI were mainly due to contributions from Ara Logos Logistics Trust (ALog Trust) after the merger in April 2022, said the real estate investment trust’s (Reit) manager in a business update on Wednesday (Apr 26).
Net asset value (NAV) per unit, however, fell to S$0.348, from S$0.401 previously. The manager attributed this to the premium paid over ALog Trust’s NAV, and transaction costs that were incurred in relation to the merger being written off.
The Reit achieved a positive rental reversion of 7.3 per cent in Q1, up from 3.1 per cent the year before, with its logistics segment continuing to demonstrate rental upside.
As at Mar 31, 2023, ESR-Logos Reit’s portfolio has a weighted average lease expiry of 3.2 years. It also posted an occupancy rate of 92.1 per cent, which is above the industry average, said the manager.
The manager noted that an equity fundraising exercise, which was announced in February this year, will raise gross proceeds of at least S$300 million.
The Reit’s gearing as at Mar 31 stood at 41.6 per cent, and will be reduced to 38 per cent upon completion of the equity fundraising exercise.
Despite headwinds in Singapore such as rising inflation and interest rates, the manager expects the logistics segment to remain strong on demand for storage space in ramp-up warehouses, along with an increasing demand for cargo lift assets for smaller occupiers.
It said that the leasing market in Australia continues to be strong, with vacancy rates decreasing over the year. As for Japan, the manager projects vacancy rates to rise above 9 per cent in the following quarters.
Units of ESR-Logos Reit closed flat at S$0.325 on Tuesday.
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