A-Reit DPU down on lack of one-off item, local portfolio facing headwinds

SINGAPORE - Ascendas Real Estate Investment Trust (A-Reit) reported a large jump in property income for the second quarter, but distribution to unitholders dropped slightly due to a lack of one-off items.

Net property income of A-Reit, which has a portfolio of 131 business and industrial assets, rose 23.1 per cent year on year to S$152.4 million in the three months ended Sep 30. The amount available for distribution was S$112.5 million, up 12.3 per cent.

"This was mainly boosted by the contributions from the acquisition of the Australian portfolio and ONE@Changi City," the reit manager Ascendas Funds Management said when announcing the results on Thursday (Oct 20). The higher distributable income was also a result of lower property tax and utilities expenses.

However, distribution per unit for the period was 4.03 cents, down 3.1 per cent from 4.16 cents a year ago, when there was a one-off distribution of taxable income from operations of S$6.5 million. Excluding the one-off impact, the estimated DPU grew 3.6 per cent year on year.

The reit's overall portfolio occupancy improved from 88.2 per cent in June to 89.1 per cent at the end of September due to new leases and expansion in China and Australia. But in its home-market Singapore, where the reit has 102 properties, signs of slowdown persisted, with local occupancy dropping from 88.3 per cent in the previous quarter to 87.9 per cent.