A-REIT – BT

A-Reit’s Q4 DPU jumps 19.8%

Net property income up 9.5% on completion of new projects

IMPROVED results for the fourth quarter capped a strong financial year for Ascendas Real Estate Investment Trust (A-Reit).

The industrial Reit, which has been actively snapping up properties or enhancing existing ones in the past financial year, expects to invest more this year if all goes well.

Gross revenue for the quarter ended March 31 grew 8.7 per cent year-on-year to $112.9 million as new projects were completed. This pulled net property income up 9.5 per cent to $84 million.

Total amount available for distribution jumped 20 per cent to $61.3 million. As a result, distribution per unit (DPU) was 3.27 cents, up 19.8 per cent.

For the full year, gross revenue climbed 8.2 per cent from the previous year to $447.6 million, and net property income increased 6.1 per cent to $339.4 million.

This contributed to a 5.6 per cent increase in total amount available for distribution to $248 million. DPU rose one per cent to 13.23 cents.

The DPU, seen against A-Reit’s closing price of $2.04 on March 30, translates to a distribution yield of about 6.5 per cent. The counter ended trading yesterday at $1.97, one cent down.

A-Reit had been busy with investments in FY10/11, committing $376.1 million to acquisitions, asset enhancement works and development projects. For instance, it recently bought Neuros and Immunos in Biopolis for $125.6 million.

The pipeline of deals this year is ‘generally more encouraging’ than last year’s, said Tan Ser Ping, CEO and executive director of A-Reit’s manager, at a briefing yesterday.

‘If everything pans out well, then I think we should do better than the last financial year,’ he said.

To support its purchases, A-Reit had raised net proceeds of around $393.3 million through a private placement last month.

Mr Tan told BT that the Reit is unlikely to need more equity fundraisings for ‘a good while’ as it will have a debt headroom of over $800 million after the placement, taking committed projects into account.

Another of A-Reit’s purchases was a business park building in Shanghai.

A-Reit will focus on both Singapore and China but in the next three years or so, its portfolio is expected to remain predominantly Singapore-based, with up to 20 per cent of assets potentially in China, Mr Tan said.