ESR-Logos Reit posts 19.4% rise in Q3 net property income, positive rental reversions

SINGAPORE – ESR-Logos Reit’s net property income (NPI) for the third quarter grew 19.4 per cent year on year to $206.1 million, its manager said on Thursday.

Gross revenue, meanwhile, rose by 19.2 per cent on the year to $290.7 million for the three months ended Sept 30, 2023.

The real estate investment trust (Reit) achieved higher rental reversions of 13.5 per cent across all sectors, from 11.4 per cent in the same period in 2022. Rental collections stood at 98.7 per cent.

Portfolio occupancy was 90.3 per cent, down from the 92.4 per cent recorded in the third quarter of 2022.

Excluding the Reit’s divestment of 2 Tuas South Avenue 2, the planned redevelopment for 2 Fishery Port Road and the newly completed asset enhance initiative for 7002 Ang Mo Kio Avenue 5, portfolio occupancy would have been 92.3 per cent, the manager said.

The manager expects rental reversion for financial year 2023 to be near financial year 2022 levels, supported by its logistics segment, which continues to benefit from favourable demand-supply dynamics.

It also projects NPI margins to remain stable at around 70 per cent.

Gearing stood at 37.7 per cent as at end-September.

The manager expects this number to fall to 35.3 per cent following the completion of its divestments.

It noted that 81.2 per cent of the Reit’s debts are on fixed rates for 1.4 years, compared with 72 per cent as at Dec 31, 2022.

This will help hedge against adverse distribution per unit impact from interest rate volatility, while providing flexibility to enjoy lower interest costs when interest rates subside. All debt expiring in financial year 2023 has also been refinanced.

The Reit’s units closed trading at 25 cents on Thursday, down half a cent or 1.96 per cent.

THE BUSINESS TIMES