Elite Commercial Reit H1 DPU down 2.7% to £0.0256 on larger unitholder base
Vivienne Tay
ELITE Commercial Reit’s distribution per unit (DPU) fell by 2.7 per cent to £0.0256 for its first half ended Jun 30, from £0.0263 in the corresponding period a year ago.
This was mainly due to the effect of a larger unitholder base as the real estate investment trust’s (Reit) manager opted to receive all its management fees in cash instead of units from FY2022 onwards.
Furthermore, last year’s DPU included an advanced distribution of £0.009 per unit paid on Apr 15, 2021, the manager said on Friday (Aug 5).
That being said, revenue and net property income (NPI) each grew 17.7 per cent year on year in the 6 months ended June, as the UK-focused Reit enjoyed the full period of revenue from new properties it acquired on Mar 9, 2021, the manager said.
Revenue stood at £18.7 million (S$31.3 million), compared with £15.9 million in H1 2021. The Reit recorded NPI of £18.1 million, compared with the £15.4 million posted a year ago.
Distributable income rose 9.7 per cent to £12.2 million, driven mainly by the full half-year rental contribution from the Reit’s maiden acquisition and tax savings.
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This was offset by the rise in borrowings due to the acquisition, increased interest costs on borrowings and marginally lower occupancy, the manager said.
The distribution will be paid out on Sep 22, after the record date on Aug 16.
The Reit’s portfolio occupancy stood at 98 per cent as at end-June, with vacancies at John Street, Sunderland and Sidlaw House, Dundee. Weighted average lease expiry was at 5.2 years.
Following a positive re-gearing exercise in the first half, the Reit’s portfolio of 155 properties was valued at around £517.7 million as at Jun 30, 2022, 3.5 per cent higher than the previous £500.1 million valuation as at Dec 31, 2021.
The revaluation gain was driven by the removal of lease break options for a majority of leases in the portfolio, offset by a reduction in the values of vacant and vacating assets, the manager said.
Shaldine Wang, chief executive officer of the manager, said a majority of the properties have inflation-linked rental escalation clauses built into the leases, presenting potential upside when rental rates adjust next year.
“About 63 per cent of our borrowings are also hedged on fixed interest rates, providing some cushioning against volatile market movements,” Wang added.
Elite Commercial Reit’s gearing stood at 41.9 per cent as at Jun 30, 2022, and there are no refinancing requirements for FY2022, the manager noted.
Elite Commercial Reit was trading 0.8 per cent or £0.005 lower at £0.61 as at 1.29 pm on Friday.
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