Ascott Reit posts 7% decline in Q4 DPU on back of one-off item

SINGAPORE - Ascott Residence Trust (Ascott Reit) posted on Tuesday (Jan 24) a 7 per cent drop in distribution per unit (DPU) to 1.93 Singapore cents for the fourth quarter ended Dec 31, 2016 from 2.07 cents a year ago, after adjusting for a one-off item. Unadjusted DPU for the quarter dipped 1 per cent to 2.04 cents.

Revenue for the quarter rose 6 per cent to S$126.75 million, mainly due to the additional revenue of S$11.9 million from Ascott Reit's acquisition of Sheraton Tribeca New York Hotel in 2016. The increase was partially offset by a decrease in revenue of S$4.4 million from existing properties, mainly in China and in the United Kingdom due to the depreciation of pound against the Singapore dollar.

Distribution income for the quarter, which grew 6 per cent to S$33.9 million, included a net realised exchange gain of S$2.0 million arising from the repayment of foreign currency bank loans with the divestment proceeds from Fortune Garden Apartments and repayment of shareholders'loan from the group's subsidiaries.

For full-year 2016, DPU dipped 3 per cent to 7.78 cents, after adjusting for equity placement and a one-off item. Unadjusted, DPU rose 4 per cent to 8.27 cents.

Distributable income rose 9 per cent to a record high of S$135 million, while revenue increased 13 per cent to S$475.6 million.

Said Bob Tan, chairman of the trust's manager: "The strong performance was due to our acquisitions of quality assets over the last two years, and our active capital and asset management. We acquired Sheraton Tribeca New York Hotel last year and our two prime properties in New York enjoy high average occupancy of over 90 per cent. The US market was our top contributor to revenue in 2016 and it is now amongst our top five markets in terms of asset value."

He added: "We are actively seeking accretive acquisitions in gateway cities in markets such as Australia, Japan, Europe and the US. We will also look at divesting properties with limited growth potential and re-deploying the proceeds in higher yielding assets."

Mr Tan also said that the acquisition of Ascott Orchard Singapore, which soft opened in December 2016, is on track to complete this year, boosting Ascott Reit's asset size to S$5.2 billion.