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'Well-diversified' portfolio, tenant base will help mitigate challenges: Ascendas Reit
ASCENDAS Reit's manager announced in a business update that although a challenging economic outlook could affect its future performance, its well-diversified portfolio and tenant base should help mitigate potential problems.
For its third quarter ended Sept 30, 2020, its portfolio occupancy had edged up to 91.9 per cent quarter on quarter, mainly attributable to a higher occupancy rate of 88.8 per cent in the Singapore portfolio.
Occupancy in its Australia portfolio declined to 97.5 per cent; and remained stable in the UK and US, at 97.5 per cent and 92.0 per cent respectively. Overall, the portfolio received a negative average rental reversion of 2.3 per cent for renewed leases in multi-tenant buildings in the third quarter.
The real estate investment trust's (Reit) manager also said that aggregate leverage was still healthy at 34.9 per cent, down from 36.1 per cent last quarter. Weighted average all-in cost of borrowing was at 2.8 per cent, while debt-maturity profile remained "well-spread" with weighted average tenure of debt at 3.7 years.
The portfolio also reported a weighted average lease expiry of 3.9 years.
Its total investment properties stood at S$12.95 billion, comprising 198 properties in four countries: Singapore accounts for 70 per cent of its total investment properties; Australia has 14 per cent; the US has 10 per cent; and the UK, 6 per cent.
Business and science parks take up the bulk of its portfolio, at 32 per cent. High specifications industrial and data centres come in second at 16 per cent.
The Reit's manager also added that it has a "well-diversified" customer base across more than 1,450 tenants from more than 20 industries including engineering, biomedical sciences, as well as logistics and supply chain management.
No single property accounts for more than 4.5 per cent of Ascendas Reit's monthly gross revenue, it said.
However, its top 10 customers (as at Sept 30, 2020), account for about 17.7 per cent of monthly portfolio gross revenue. These include Singtel, DSO National Laboratories and DBS Bank, said the manager of Ascendas Reit.
The business update also outlined its plans to build a green and sustainable portfolio - common facilities' electricity usage at three buildings located at one-north will be fully powered with renewable energy generated from Ascendas Reit's solar farms by 2022. This, it said, can power 1,300 four-room HDB flats for a year and avoid 2.4 million kg of carbon dioxide.
Units of Ascendas Reit ended S$0.05 or 1.62 per cent lower at S$3.03.