A-Reit's DPU rises 13% in 4th quarter

Higher revenue due to acquisitions in last 2 years that included Sydney business park property

Ascendas Real Estate Investment Trust posted a 13 per cent jump in distribution per unit (DPU) to 3.852 cents for the fourth quarter, underpinned by higher net property income from new acquisitions and cost management.

Gross revenue for the three months to March 31 rose by 2.4 per cent to $208.9 million. Net property income was 7.4 per cent higher at $154.1 million. The amount available for distribution rose by 25.5 per cent to $111.9 million.

For the full year, net property income rose 14.5 per cent to $611 million, while gross revenue rose 9.1 per cent to $830.6 million.

The higher revenue was due mainly to acquisitions in the second half of 2015 of One@Changi City and a portfolio of Australian logistics properties, as well as acquisitions last year of three Science Park buildings and a business park property in Sydney.

But this was partially offset by sales of three properties in China and Four Acres Singapore.

Property operating expenses also fell 3.4 per cent year on year due to lower utilities expenses and a one-off property tax refund.

  • AT A GLANCE

    GROSS REVENUE: $208.9 million (+2.4%)

    NET PROPERTY INCOME: $154.1 million (+7.4%)

    DISTRIBUTION PER UNIT: 3.852 cents (+13%)

Mr Chia Nam Toon, chief executive of the manager, attributed Ascendas' good performance and stable distributions to its investment strategy and "proactive asset management".

But he warned of headwinds, including new supply of Singapore industrial properties, and lingering geopolitical uncertainty.

With islandwide vacancy for industrial property at 10.5 per cent as at December 2016, the incoming supply of 2.4 million sq m of industrial space this year will likely put further pressure on rental rates and occupancy, Mr Chia said. To mitigate this, Ascendas expanded its Australian portfolio and undertook cost reduction initiatives.

Over the year, the manager bought $565.6 million worth of properties in Australia and Singapore. These included a Singapore Science Park 1 property and the Sydney business park property.

With these acquisitions, the business and science park segment grew to 39 per cent of Ascendas' portfolio, from 34 per cent a year ago.

A version of this article appeared in the print edition of The Straits Times on April 26, 2017, with the headline 'A-Reit's DPU rises 13% in 4th quarter'. Print Edition | Subscribe