ASCENDAS Real Estate Investment Trust (A-Reit) yesterday posted a net property income of $80.7 million for its first quarter ended June 30, 2009. This is 15.8 per cent more than that a year ago, due mainly to contributions from a bigger portfolio.

Income available for distribution also increased by 17.9 per cent to $61 million.

But while earnings rose, the unit base also grew from the private placement and preferential offering of new units at the start of 2009. As a result, distributable income per unit (DPU) in Q109 dropped to 3.62 cents – down 6.9 per cent from 3.89 cents in the same period last year. Taking into account units issued as at June 30, 2009, DPU in Q108 would have been 3.07 cents. On this pro forma basis, DPU in Q109 would be 17.9 per cent more.

A-Reit continued to enjoy positive rental reversion for renewed leases at its business and science parks, hi-tech industrial space and logistics and distribution centres during the downturn. The increase, however, was smaller compared with a year ago. Renewal rates at its light industrial space fell. The overall occupancy rate for A-Reit’s portfolio dropped slightly to 97.1 per cent in Q1 09, from 98.6 per cent a year ago.

As at June 30, A-Reit has 89 properties with a total book value of about $4.4 billion. The weighted lease term to expiry is about five years. Only 9.4 per cent of A-Reit’s gross revenue is due for renewal for the rest of the financial year.

‘Credit market conditions have improved in the last few months and interest margins have also improved slightly,’ A-Reit said. It added that it will continue to diversify funding sources, and it is finalising the issuance of a four-year $125 million fixed-rate note. A-Reit’s aggregate leverage as at June 30 was 35.5 per cent.

A-Reit said that its fortunes will depend largely on whether a sustainable recovery comes, especially in terms of global end-consumer demand. ‘We expect the net property income outlook for A-Reit for FY09/10 to be about the level achieved in FY08/09,’ it said. ‘However, with an expected higher cost of borrowing, the income available for distribution may be lower and will also be spread over a larger unit base.’