ESR Reit Q1 DPU jumps 18.9% to 1.007 cents post-Viva Trust merger

SINGAPORE - Industrial landlord ESR Reit saw an 18.9 per jump in distribution per unit (DPU) to 1.007 cents for its first quarter from 0.847 cent a year ago, on the back of contributions from Viva Industrial Trust's properties post-merger.

Net property income (NPI) for the three months to end-March surged 104.2 per cent to $48.6 million from $23.8 million a year ago, after the acquisition of 15 Greenwich Drive and the nine properties from Viva Trust's portfolio following the completion of the merger in October 2018, as well as the leasing up of 30 Marsiling Industrial Estate Road 8 and 3 Pioneer Sector 3 and rental escalations in existing properties .

This growth was partially offset by the lease conversions from single to multi-tenancy for two properties.

Gross revenue rose 92.9 per cent to $64.8 million from $33.6 million.

Total amount available for distribution to unitholders swelled 138.8 per cent to $32 million from $13.4 million.

Portfolio occupancy forthe first quarter remained healthy at 92 per cent, above the JTC average of 89.3 per cent, said ESR Reit's manager.

It also said that Hyflux Membrane Manufacturing continued to meet its rental obligations for 8 Tuas South Lane in 1Q2019. It holds security deposits equivalent to three months of rental in the form of bank guarantees amounting to approximately $2.1 million, which have not been drawn down. Hyflux Membrane accounted for 3.2 per cent of the group's total revenue for Q1 2019.

Adrian Chui, chief executive officer and executive director of ESR Funds Management, said: "Following the successful merger (with Viva Industrial Trust), our portfolio has been integrated smoothly. Our financial and real estate systems and processes have been integrated to achieve a better operating platform while we continue to improve our human resource capacities.

"At the same time, our post merger portfolio has also become more diversified and stable with reduced concentration risks and improved trading liquidity and coverage."

ESR units closed flat at $0.50 on Tuesday, before the release of results.