ESR-Reit posts 20.2% drop in Q3 DPU to 0.798 S cent

ESR-REIT'S distribution per unit (DPU) fell 20.2 per cent to 0.798 Singapore cent for its third quarter ended Sept 30, 2020, from one cent a year ago, its manager announced on Friday in a bourse filing.

The manager also announced the release of S$3.5 million in distributable income from the first quarter of 2020, previously retained in view of Covid-19 uncertainties.

Gross revenue was down 8.2 per cent to S$56.9 million for the quarter, from S$62 million a year ago. Meanwhile, net property income (NPI) slipped 10.8 per cent to S$40.4 million on the year, from S$45.3 million.

The declines in gross revenue and NPI were mainly due to the lease conversion from single to multi-tenancies for five properties where the Reit has to bear land rent, property tax and maintenance costs that were previously borne by tenants under master lease agreements.

The declines were also due to non-renewals and downsizing by certain tenants and rental rebates set aside for or given to tenants as part of the Reit's measures to support tenants adversely affected by the Covid-19 outbreak, the manager said.

Distributable income fell 15.1 per cent year on year to S$24.8 million, from S$29.2 million. The manager said the release of S$3.5 million or 50 per cent of the retained distribution reflects the resilience and stability of the portfolio since the start of the "circuit-breaker" period and the gradual resumption of economic activities.

The distribution will be paid out on Dec 30, after books closure on Nov 9.

Adrian Chui, chief executive and executive director of the manager, said the Reit's capital structure remains balanced with a well-staggered debt expiry profile and it continues to enjoy strong banking support.

"Our 100 per cent unencumbered portfolio provides us with the flexibility to tap into various debt-financing options and secure committed credit lines of S$117 million to execute our organic growth strategies," he added.

Units of ESR-Reit closed down 4.2 per cent or 1.5 Singapore cents to 34.5 cents on Thursday.