ESR-Reit's DPU drops 6.7% for Q4

ESR-Reit reported a 6.7 per cent drop in distribution per unit (DPU) to 0.929 Singapore cent for the fourth quarter ended Dec 31, 2017.

For fiscal 2017, the Reit (real estate investment trust) reported an overall fall in DPU of 7.7 per cent to 3.853 Singapore cents.

This came as net property income (NPI) rose 1.2 per cent to S$19.928 million for the fourth quarter, but fell 4.7 per cent for the fiscal year to S$78.445 million.

The lower NPI for the full year was mainly due to the loss of revenue during the transition phase of properties moving from single-tenanted to multi-tenanted, and an increase in property operating expenses such as leasing commission fees, land rental, maintenance costs and other property expenses.

Revenue for fiscal 2017 was negatively impacted by only partial benefit being realised from the Reit's acquisitions of 8 Tuas South Lane and 7000 Ang Mo Kio Ave 5, which were completed on Dec 13 and 14 respectively. Gross revenue for fiscal 2017 was S$109.7 million, down 2.1 per cent from fiscal 2016.

The Reit also completed the divestment of two properties at 87 Defu Lane 10 and 23 Woodlands Terrace in the fourth quarter.

For fiscal 2017, the Reit said that it had renewed and leased around 1.19 million square feet of leases, and its portfolio had a weighted average lease expiry of 4.3 years.

To rebalance its capital structure, ESR-Reit added that it will undertake an equity fundraising exercise amounting to S$125 million.

It has proposed to issue up to 263.0 million new units via private placement to institutional investors, or a non-renounceable preferential offering to existing unitholders on a pro-rata basis.

As at Dec 31, 2017, the Reit's portfolio comprises 48 properties across Singapore, totalling a gross floor area of about 9.9 million sq ft.

The payment date has been set for Feb 28, 2018, with the books closure date on Jan 25.