Ascott Reit posts 5% rise in Q4 DPU

lyf one-north Singapore, Ascott Reit’s first co-living property that will open in 2021.
lyf one-north Singapore, Ascott Reit’s first co-living property that will open in 2021.PHOTO: ASCOTT REIT

SINGAPORE - Ascott Residence Trust (Ascott Reit) saw distribution per unit (DPU) rise 5 per cent year on year from 2.04 cents to 2.15 cents in the fourth quarter ended Dec 31, 2018, the group said in a Singapore Exchange filing on Tuesday morning (Jan 29).

This came as unitholders' distribution went up 6 per cent to $46.5 million in Q4 from the previous year, which included a one-off partial distribution of divestment gain of $6.5 million.

Revenue notched up two per cent to $136.5 million, mainly due to the additional revenue of $0.4 million from the full quarter contribution from Ascott Orchard Singapore which was acquired on Oct 10, 2017, and higher revenue from existing properties, partially offset by a drop in revenue of $1.1 million from divestments.

This brought revenue per available unit (RevPaU) to $163 for Q4, up 5 per cent from a year ago.

Gross profit increased by 3 per cent to $63.4 million on the higher revenue.

In Q4, Ascott Reit's key markets with strong operating performance included the United States, China and Japan. Gross profit for the US market surged 17 per cent, on the back of higher revenue from the upgraded apartments at Sheraton Tribeca New York Hotel. In China, excluding the contribution from Citadines Gaoxin Xi'an and Citadines Biyun Shanghai that were divested in January 2018, gross profit grew 16 per cent, as there were more guests on long stay. Gross profit in Japan rose 12 per cent due to stronger corporate and leisure demand in Tokyo.

For full-year 2018, DPU rose 1 per cent to 7.16 cents, while unitholders' distribution ticked up two per cent to $154.8 million - a record high for the group.

Revenue for FY18 grew 4 per cent to $514.3 million, on the back of additional contribution of $25.8 million from the acquisitions made in 2017 and an increase in revenue from the existing properties. RevPaU increased by 5 per cent, from $144 in year-to-date (YTD) Dec 2017 to $151 in YTD Dec 2018.

Gross profit increased 5 per cent to $239.4 million.

Earlier in January, Ascott Reit had announced the sale of Ascott Raffles Place Singapore.

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

In its outlook, the group said that yield enhancement may continue to be challenging in the near term but remains a key focus. It noted that proactive asset management, including asset enhancement initiatives and leveraging on technology, improves guests' satisfaction and boost property performances and valuation.

Beh Siew Kim, ARTML's CEO, said: "While there are mixed views regarding further interest rate hikes in 2019, 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 Ascott Reit's total borrowings on fixed interest rates and a well-spread debt maturity where less than 5 per cent of debt will mature in 2019."

The Reit closed at $1.17 on Monday, up one Singapore cent or 0.86 per cent.