ESR-Reit H1 DPU up 14% to 1.554 Singapore cents

J91U on Friday reported its distribution per unit (DPU) rose 14.3 per cent to 1.554 Singapore cents for the half year ended June 30, 2021, from 1.359 cents in the year-ago period.

Gross revenue for the industrial properties real estate investment trust was up 5.4 per cent to S$119.8 million, from S$113.8 million a year ago.

The Reit's manager attributed the revenue improvement to the absence of provisions for Covid-19 rental rebates as well as lower property expenses.

Net property income grew 8.4 per cent on the year to S$87 million for the half-year, from S$80.2 million.

Total income available for distribution rose 18.7 per cent year on year to S$56.8 million, from S$47.8 million.

The Reit's portfolio occupancy rose to 91.7 per cent as at end-June, up from 90.8 per cent at end-March. This rate, however, excludes properties in the pipeline for divestment.

Rental reversion was a negative 0.2 per cent for Q2 and negative 1.6 per cent for H1 due to lower renewal rates for certain large business park tenants. But properties in the high-specs industrial, logistics, and general industrial sectors saw positive reversions in Q2.

Adrian Chui, chief executive officer and executive director of the manager, said in a statement accompanying the release of the results that the post-pandemic economy is experiencing a "global pivot towards new economy assets", including "modern ramp-up warehouses and high-specs infrastructure". This shift is impacting consumption patterns across ESR-Reit's industrial space.

ESR-Reit's manager also noted that with Singapore's return to Phase 2 (Heightened Alert) measures to curb the spread of Covid-19, the completion of new industrial space will be further delayed to the second half of 2021 and 2022. This would affect rents and prices in the coming quarters.

ESR-Reit units closed unchanged at 44 Singapore cents on Friday.