Ascott Reit DPU up 5% to 2.15 cents

A lift in revenue means an increased payout is in the offing for unit holders of Ascott Residence Trust (Ascott Reit).

Distribution per unit (DPU) rose 5 per cent to 2.15 cents in the fourth quarter, it reported yesterday.

The increase comes on the back of a 6 per cent lift in unit holders' distribution to $46.5 million for the three months to Dec 31. This included a one-off partial distribution of divestment gain of $6.5 million.

Revenue rose 2 per cent to $136.5 million, mainly due to the full-quarter contribution of $400,000 from Ascott Orchard Singapore, which was acquired in October 2017.

There was also higher revenue from existing properties, partially offset by a drop of $1.1 million from divestments.

This brought revenue per available unit to $163 in the fourth quarter, up 5 per cent from a year earlier.

Gross profit increased 3 per cent to $63.4 million.

Ascott Reit's key markets in the quarter included the United States, China and Japan.

Gross profit in the US surged 17 per cent on the back of higher revenue from the upgraded Sheraton Tribeca New York Hotel.

In China, excluding the contribution from Citadines Gaoxin Xi'an and Citadines Biyun Shanghai, which were divested in January last year, gross profit grew 16 per cent as there were more guests on long stays. Gross profit in Japan rose 12 per cent due to stronger corporate and leisure demand in Tokyo.

DPU rose 1 per cent to 7.16 cents for the full year, while unit holders' distribution rose 2 per cent to $154.8 million - a record high.

Revenue for the year grew 4 per cent to $514.3 million, while gross profit increased 5 per cent to $239.4 million.

Ascott Reit announced earlier this month that it had sold Ascott Raffles Place Singapore.

Mr Bob Tan, chairman of Ascott Residence Trust Management, said: "These divestments will give Ascott Reit the financial flexibility to invest in new accretive opportunities that will enhance our portfolio and returns to unit holders."

The group said yield enhancement may continue to be challenging in the near term, but remains a key focus.

Mr Beh Siew Kim, the manager's chief executive, said: "While there are mixed views regarding further interest rate hikes this year, any possible increase is not expected to have any significant impact on Ascott Reit's total returns.

"We maintain a disciplined and prudent approach towards capital management, with 80 per cent of total borrowings on fixed interest rates and a well-spread debt maturity where less than 5 per cent of debt will mature in 2019."

Ascott Reit units closed up 1.71 per cent to $1.19 yesterday.

A version of this article appeared in the print edition of The Straits Times on January 30, 2019, with the headline 'Ascott Reit DPU up 5% to 2.15 cents'. Print Edition | Subscribe