ESR-Reit cuts first-half DPU to 1.162 S cents

THE distribution per unit (DPU) of ESR-Reit fell by 42.2 per cent to 1.162 Singapore cents for the half year ended June 30, 2020, from 2.011 cents in the year-ago period.

The lower DPU was mainly due to the impact of the novel coronavirus pandemic and the subsequent "circuit-breaker" measures imposed by the Singapore government, as well as the retention of about S$7 million of distributable income in the first quarter for "prudent cash flow management", the industrial real estate investment trust's (Reit) manager said in results released on Thursday.

Gross revenue was down 11.5 per cent to S$113.8 million for the first six months, from S$128.6 million a year ago.

Net property income (NPI) fell by 16.8 per cent on the year to S$80.2 million for H1 2020, from S$96.4 million.

The lower gross revenue and NPI were largely attributable to lease conversion from single to multi-tenancy for certain properties, as well as non-renewals and downsizing by some tenants.

Rental rebates set aside for and/or given to tenants totalled about S$4.6 million. These are part of ESR-Reit's measures to support tenants adversely affected by the coronavirus pandemic.

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Total amount available for distribution to unitholders declined 25.3 per cent year on year to S$47.8 million, from S$64 million.

For the second quarter, DPU dropped by 34.1 per cent to 0.662 Singapore cent, from 1.004 cents a year ago. The distribution for Q2 will be paid out on Sept 17, after books closure on July 24.

ESR-Reit has proposed a merger with Sabana Shari'ah Compliant Industrial Real Estate Investment Trust to form one of the largest industrial Reits in Singapore, their managers announced in a separate filing on Thursday.

ESR-Reit called for a trading halt on Thursday before the market opened. Its units closed flat at S$0.39 on Wednesday.