a-iTrust – BT

a-iTrust reports $13.8m Q2 distributable income

BUSINESS space trust Ascendas India Trust (a-iTrust) yesterday reported distributable income of $13.8 million for the second quarter ended Sept 30, 2008 – 24 per cent higher than a year ago.

This translates to a distribution per unit (DPU) of 1.82 cents, 23 per cent more than for the corresponding period last year. The DPU for the first half of the year stands at 3.47 cents, and represents an annualised yield of 13.2 per cent when seen against a-iTrust’s closing unit price of 52.5 cents on Sept 30.

‘Our high-quality IT parks, serving our target market of largely multinational corporations which appreciate the quality of the environment, services and lifestyle within our parks, continue to enjoy rental growth, high occupancy and a stable income stream,’ said Jonathan Yap, CEO of a-iTrust trustee-manager Ascendas Property Fund Trustee.

a-iTrust’s portfolio of completed space across the Indian cities of Bangalore, Chennai and Hyderabad, amounting to 4.8 million square feet, was 98 per cent occupied as at Sept 30. Less than 18 per cent of space is due for renewal in the current financial year.

In the first half of the financial year, 0.6 million sq ft of space was leased or renewed at higher average rental rates.

With economic and financial headwinds sweeping across the world, Mr Yap believes that a-iTrust’s target tenants will continue to find India’s cost competitiveness and large market attractive. According to the trust, the economic slowdown could encourage the offshoring of operations to India. Tighter credit conditions could even work in its favour by reducing the new supply of space in the market.

As for financing, ‘I don’t see a very big concern on that front,’ Mr Yap told BT. a-iTrust raised around $550 million when it was listed in August last year. Its gearing as at Sept 30 was 5 per cent. It also had cash and cash equivalents of $42 million, exceeding the $20 million of borrowings payable within a year.

In fact, banks looking to diversify their loan books could consider a-iTrust, said Mr Yap. ‘If lenders want a bit of Indian exposure, we do believe that the trust represents a relatively safe way for them to do that, (because) it is regulated by Singapore law and the portfolio in India is very established.’

a-iTrust’s units ended trading 3.5 cents higher yesterday at 46 cents.