New properties boost A-Reit's income

An artist's impression of One@Changi City.
An artist's impression of One@Changi City. PHOTO: ASCENDAS PTE LTD

Ascendas Real Estate Investment Trust (A-Reit) posted higher distributable income for the first quarter, boosted by its acquisitions of Australian logistics properties and ONE@Changi City.

The company bought 27 logistics properties in Australia in the second half of last year and ONE@Changi City in March this year.

Distributable income for the first quarter grew 15.5 per cent to $106.9 million.

Distribution per unit (DPU) rose 4 per cent to 3.996 cents. Gross revenue for the quarter grew 15 per cent to $207.6 million.

Net property income jumped 20.3 per cent to $149.5 million.

"A-Reit achieved a steady set of results for the first quarter despite tough market conditions," Mr Chia Nam Toon, chief executive officer and executive director of the Reit manager, said in a press release yesterday.

  • AT A GLANCE

  • GROSS REVENUE

    $207.6 million (+15%)

    NET PROPERTY INCOME

    $149.5 million (+20.3%)

    DISTRIBUTION PER UNIT

    3.996 cents (+4.0%)

"Our new acquisitions contributed to the performance, while the existing properties remained resilient with moderately improved occupancies and rental reversions," he said.

Mr Chia was appointed chief executive of the Reit manager in April this year.

Occupancy rates for the overall portfolio improved to 88.2 per cent as of June this year, up from 87.6 per cent at the end of March.

The Reit manager said in the press release that it expected modest rental reversion as leases accounting for about 16.6 per cent of gross revenue in Singapore are due for renewal this year.

Rental reversion refers to adjustments made to rental rates after a lease expires.

Industrial property market conditions in Singapore are expected to remain challenging, said the Reit manager.

"With significant new supply and tepid economic growth both in Singapore and globally, there may be pressure on occupancy growth in Singapore," it added.

A-Reit is Singapore's first and largest listed business space and industrial real estate investment trust.

It has a diversified portfolio of 102 properties in Singapore and 27 logistics properties in Australia.

In China, it owns two business-park properties.

As at June 30, its total assets amounted to about $9.8 billion.

In Australia, the outlook is brighter. Demand for logistics space is expected to be strong, backed by a fairly steady labour market, weaker Australian dollar and firm consumer spending, it said.

A-Reit units closed flat at $2.49 yesterday.

A version of this article appeared in the print edition of The Straits Times on July 22, 2016, with the headline 'New properties boost A-Reit's income'. Print Edition | Subscribe