A-REIT – BT

A-Reit’s DPU down 5% with more units issued

ASCENDAS Real Estate Investment Trust (A-Reit) has reported a 4.4 per cent year-on-year rise in total amount available for distribution to $65.9 million for its first quarter ended June 30, 2011.

But the industrial Reit’s distribution per unit (DPU) dipped 5 per cent to 3.2 cents, mainly due to an 11.1 per cent increase in the number of units outstanding as a result of new units issued in the first quarter of this financial year. Gross revenue for the quarter ended June 30 grew 5.6 per cent year on year to $119.9 million, contributed mainly by new investments. But operating expenses were higher because of higher utilities cost, resulting in net property income rising just 1.6 per cent to $8.88 million.

The fiscal first quarter saw A-Reit’s occupancy rate rising to 92.5 per cent for its multi-tenanted properties and 96.2 per cent for its portfolio, up from 92.1 per cent and 96 per cent respectively.

‘Positive rental reversion was seen throughout all segments as a result of the improvement in the industrial rental market,’ said Tan Ser Ping, CEO and executive director of A-Reit’s manager Ascendas Funds Management (S) Ltd.

With improving industrial rental market, A-Reit could also benefit from leases that are up for renewal.

For the balance of the financial year ending March 31, 2012, the Reit has 10 per cent of its revenue due for renewal. The majority of these leases have passing rents that are below the existing market rents. Looking ahead, A-Reit expects global growth to moderate and Singapore’s economic outlook to remain positive in the second half of this year.

With its diversified portfolio as well as a good mix of properties with long and short-term leases, A-Reit expects to sustain its current performance.

The Reit will continue to seek investments with good fundamentals and potential asset enhancement opportunities to complement its existing portfolio and to further enhance its footprint in the business space and industrial property arena with the portfolio comprising predominantly Singapore-based assets in the foreseeable future, the Reit’s manager said.

The counter ended trading yesterday down two cents at $2.14.