ESR Reit DPU up 4.7% for Q2

ESR Reit (real estate investment trust) has reported a second-quarter distribution per unit (DPU) of 1.001 Singapore cents, up 4.7 per cent from 0.956 Singapore cent for the same period a year earlier, on higher net property income and and distributions from gains relating to past divestments.

This improvement was largely due to an increase in net property income and distributions from other gains which offset the negative impact of ongoing asset enhancement initiatives and conversion of single-tenanted buildings to multi-tenanted ones, the Reit manager said.

Net property income rose 22 per cent to S$23.4 million, mainly due to full-quarter contributions from the two new acquisitions (8 Tuas South Lane and 7000 Ang Mo Kio Avenue 5) which were completed in mid-December 2017. These helped to partially offset the master lease conversions, lease non-renewals and absence of revenue from properties divested in the past year.

Gross revenue in the three months ended June 30 was S$32.5 million, up 17.6 per cent from the same period a year earlier. 

Net asset value per unit was 58.2 Singapore cents as at June 30, from 58.24 Singapore cents as at March 31.

Portfolio occupancy rose to 91.4 per cent for the second quarter, from 90.7 per cent for the first quarter.

ESR Reit owns 47 assets located close to major transportation hubs and key industrial zones across Singapore, with a weighted average lease expiry of 4.5 years.

The Reit manager said: "Although an increase in enquiries have been noted recently, the manager expects the leasing market to remain competitive notwithstanding that demand and supply dynamics appear to be improving as historically high supply levels look to taper off by late 2018."

Unitholders will vote on the proposed merger with Viva Industrial Trust by way of a trust scheme of arrangement at an extraordinary general meeting on August 31.