AscottREIT – BT

Ascott trust’s income surges 58% in Q2

S’pore and Vietnam operations, strong revenue from new properties boost income to $12.1m

ASCOTT Residence Trust (ART) yesterday said that distributable income for the second quarter ended June 30, 2007, rose 58 per cent to $12.1 million, boosted by its operations in Singapore and Vietnam as well as revenue from new properties. Distributable income for the same three months in 2006 was $7.7 million. Distribution per unit (DPU) increased by 18 per cent to 2.01 cents, from 1.70 cents in 2006.

For the first six months of 2007, ART recorded distributable income of $20.2 million while DPU came to 3.60 cents. There is no comparable data for the first half of 2006 as the trust was listed only in mid-January last year.

ART’s portfolio now consists of some 2,900 serviced residence units in 18 properties across seven countries.

The trust’s strong second quarter showing was underpinned by strong revenue growth. Revenue for the three months rose 55 per cent to $40.6 million, mainly due to contributions from six new properties acquired over the past year.

Existing properties also performed well. Overall revenue per available unit (Revpau) increased by 7 per cent to $132 in the second quarter, said ART.

‘In particular, our Singapore and Vietnam properties achieved the strongest performance, with double-digit growth in revenue and gross profit,’ said Chong Kee Hiong, chief executive of the trust’s manager Ascott Residence Trust Management Limited (ARTML).

ART is aiming to grow its portfolio to $2 billion by end-2008, from $1.2 billion now, and is keen to buy properties in China, South Korea, Japan, Vietnam and Australia, Mr Chong said. The trust is expanding in line with parent company The Ascott Group, which wants to increase the number of units it manages to 25,000 by 2010 from more than 19,000 now.

The trust has targeted $500 million worth of assets across Asia now owned by Ascott for acquisition by end-2008, Mr Chong said. If it manages to pick up all the identified assets, ART will be able to add some 12 properties and 1,900 units to its portfolio. In Singapore, ART hopes to buy Ascott Singapore Raffles Place.

ART is upbeat about the rest of the year. ‘The business and market sentiments in Asia remain positive and will continue to attract foreign direct investments from multinational companies, which will bring more business travellers to the region,’ the trust said in a filing to the Singapore Exchange. ‘This will spur demand and drive Revpau growth for the Group’s serviced residences.’
Said Mr Chong: ‘ART is on track to deliver the forecast annualised DPU of 7.27 cents for the full year.’

ART’s shares closed unchanged at $2.00 yesterday.