SINGAPORE (THE BUSINESS TIMES) - Ascott Residence Trust's (ART) distribution per stapled security (DPS) fell by 69 per cent to 1.05 cent cents for its half year ended June 30, 2020 from 3.43 cent cents a year ago.
Revenue was down 16 per cent to $208.5 million for the six-month period, from $248.4 million a year earlier.
This was mainly attributed to the decrease in revenue of $4.2 million from the divestment of Ascott Raffles Place Singapore and Somerset West Lake Hanoi, as well as lower revenue of $91.1 million from the existing portfolio, the managers said in a regulatory filing on Tuesday (July 28).
The decrease was partially offset by the additional contribution of $55.4 million from the acquisition of Ascendas Hospitality Trust's (A-HTrust) portfolio in December 2019, and the acquisition of Quest Macquarie Park Sydney and Citadines Connect Sydney Airport in February 2020 and May 2019 respectively.
Gross profit slipped 28 per cent to $88.6 million, from $122.3 million a year ago.
Meanwhile, distributable income declined 56 per cent year on year to $32.6 million, from $74.6 million. The distribution will be paid out on Aug 28, after books closure on Aug 6.
In view of the uncertainty surrounding the Covid-19 situation, ART has retained about 15 per cent, or $5 million of its income available for distribution to stapled securityholders, as rent negotiations are still ongoing and ART may grant further rental deferment and/or waivers to support some tenants through this challenging period, the managers said.
The H1 2020 distribution included a $5 million top-up to mitigate the impact of Covid-19 on distributions and to share past divestment gains with stapled securityholders, they added.
According to the managers, the eventual distribution of the 15 per cent retained amount will depend on the final amount of income available for distribution based on the financial results for the full year ending Dec 31, 2020.
ART is the stapled group formed after the combination of real estate investment trusts Ascott Residence Trust (Ascott Reit) and A-HTrust.
Beh Siew Kim, chief executive officer of the managers, said: "Given the risk of resurgence of Covid-19, we expect the revenue per available unit of our properties to remain under pressure in the near term. Nonetheless, ART remains well capitalised with sufficient liquidity to navigate through the crisis."
ART has about $620 million in cash on-hand and unutilised credit facilities as at end June. In mid July, the stapled group received $163.3 million from the sale of partial gross floor area of Somerset Liang Court Singapore and obtained an additional S$60 million in credit facilities, the managers said.
Assuming a worst-case, zero-income scenario, ART has sufficient liquidity to cover approximately two years of fixed costs, its managers said on Tuesday.
On Monday, they announced that ART had entered into two conditional agreements to divest Ascott Guangzhou in China and Citadines Didot Montparnasse Paris in France for a total of $191.4 million. ART is expected to realise total estimated net gains of about $23.2 million upon the completion of both transactions.
In Singapore, redevelopment works at the site of Somerset Liang Court Singapore will begin soon. The new Somerset serviced residence with a fresh 99-year lease is expected to open in the first half of 2025. ART's first co-living property, lyf one-north Singapore, is also on track to open in 2021.
Stapled securities of ART closed at 92 cent cents on Monday, down 1.5 cents or 1.6 per cent.
With additional information from The Straits Times