ESR Reit Q3 net property income falls 4.2% to S$237.5 million

[SINGAPORE] ESR Real Estate Investment Trust (Reit) reported a 4.2 per cent year-on-year decline in net property income (NPI) to S$237.5 million for the three months ended Sep 30, from S$247.8 million in the year-ago period.

On a same-store basis, NPI fell 1 per cent to S$223.3 million in Q3 from a year ago due to higher utilities and property tax. However, the drop was partially offset by positive rental reversions and higher rental rates from new leases.

Revenue fell 1.5 per cent to S$329.6 million from S$334.5 million previously, the Reit’s manager said in its third-quarter business update on Tuesday (Oct 27).

The manager attributed the declines mainly to the divestment of 12 non-core properties in FY2025 and the first nine months of 2026, partially offset by positive rental reversions from renewals, higher rental rates from new leases and income from the completion of an asset enhancement initiative at 29 Tai Seng Street.

On a same-store basis, revenue rose 1.8 per cent year on year to S$308.5 million, while NPI slipped 1 per cent to S$223.3 million.

The same-store figures excluded the 12 non-core properties divested during FY2025 and the first nine months of 2026, as well as six Australian logistics properties acquired in September 2026.

The manager said the increase in same-store gross revenue was driven by positive rental reversions and higher rental rates from new leases. However, higher utilities and property taxes weighed on NPI.

Despite the decline in NPI, distributable income rose 1 per cent year on year to S$136 million, from S$134.6 million previously.

Core distributable income grew 1.5 per cent, supported by lower borrowing costs from lower base rates and debt repayments using divestment proceeds, as well as higher income from Australian property funds.

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These gains were partially offset by lower NPI, while total distributable income growth was moderated by lower distributions of other gains.

Core earnings from operations accounted for 98 per cent of total distributable income, up from 97 per cent in the year-ago period.

Units of ESR Reit closed 1 per cent or S$0.02 lower at S$1.97 on Monday.