Elite Commercial Reit posts H1 DPU of 2.63 pence, 8.7% above IPO projection
ELITE Commercial Reit MXNU 's distribution per unit (DPU) rose by 34.9 per cent to 2.63 pence for the six-month period ended June 30, from 1.95 pence a year ago.
The DPU was also 8.7 per cent higher than the 2.42 pence the real estate investment trust had forecast upon its initial public offering (IPO), which was completed on Feb 6, 2020.
Gross revenue was up 70.6 per cent to £15.9 million for the half-year period, from £9.3 million a year ago, and also up 37.7 per cent from its IPO projection of £11.5 million.
The Reit's results were boosted by contributions from its newly acquired portfolio, which is 99 per cent leased to the AA-rated UK government, the manager said in a bourse filing on Monday.
The Reit had in March completed its maiden acquisition of 58 properties in the UK for £212.5 million.
Net property income grew by 69.9 per cent on year to £15.4 million from £9.1 million, and was also 37 per cent higher than its IPO forecast of £11.2 million.
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Distributable income rose 71.3 per cent on year to £11.2 million from £6.5 million, up 37.1 per cent from its IPO projection of £8.1 million.
The distribution will be paid out on Sept 24, after the record date on Aug 11.
The manager also noted that finance costs were 62.2 per cent higher than IPO forecasts, largely due to a drawdown of additional loans to finance the newly acquired properties.
It added that it is in the midst of applying for a technical listing of its UK unit, Elite UK Commercial Holdings, on The International Stock Exchange to enhance its tax structure and reap tax savings to further improve the Reit's distributable income, and the listing will likely be completed in the third quarter of 2021.
Chief executive of the manager Shaldine Wang said: "The acquisition increases our overall portfolio's London exposure to about 14 per cent and this is beneficial to the Reit's long-term rental and capital growth as London properties have higher value, growth and redevelopment potential, and liquidity.
"We remain focused on realising growth opportunities via acquisition of assets which are leased by various ministries of the UK government through our right of first refusal pipeline from the Reit's sponsors and open market supply."
The Reit's portfolio is primarily occupied by the Department for Work and Pensions, which is the UK's public service department for crucial welfare, pensions and child maintenance policy.
Units of Elite Commercial Reit closed flat at 67.5 pence on Monday.
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