A-REIT – BT

A-Reit full-year DPU up 2.5%

Amount available for distribution in Q4 rises 19% to $72.9 million

A SET of decent results for its final quarter capped off an eventful financial year for Ascendas Real Estate Investment Trust (A-Reit).

Gross revenue for the quarter ended March 31 jumped 19 per cent year on year to $134.4 million, mainly due to the acquisitions of Cintech I, Cintech II and Cintech III & IV in March this year, as well as new projects such as FoodAxis@Senoko that were completed.

Consequently, net property income rose 13.2 per cent over the same period to $95.1 million.

The total amount available for distribution rose 19 per cent to $72.9 million, translating to a distribution per unit (DPU) of 3.50 cents.

For the full year, gross revenue climbed 12.4 per cent from the previous year to $503.3 million, with net property income rising 8.5 per cent to $368.3 million.

This resulted in a 13.6 per cent spike in the total amount available for distribution to $281.7 million. DPU for the 12 months ended March 31, 2012 rose 2.5 per cent to 13.56 cents from a year ago, translating to a distribution yield of 6.7 per cent when placed next to the Reit's closing price of $2.02 on March 30, 2012.

The counter ended trading yesterday at $2.01, up 1.5 cents, or 0.8 per cent.

Said Tan Ser Ping, CEO and executive director of the Reit's manager: "This year has been an active year for A-Reit with nearly $1 billion worth of new investments made, concluding the year with 102 properties and a total asset of about $6.6 billion. Even so, A-Reit was able to maintain an aggregate leverage of 36.6 per cent as at March 31, 2012 as a result of proactive and prudent capital management."

However, the industrial Reit – which has been on an active acquisition trail over the past financial year, purchasing a total of seven properties (including its maiden acquisition in Beijing, China) – expects a slowdown in such activities in the coming year.

Said Mr Tan: "The situation during the last financial year was unusual where we had quite a number of opportunities which we took advantage of. We do not think the same kind of volume would be taking place again this year."

The manager also priced the issuance of 10 billion yen (S$154.9 million) in 2.55 per cent per annum Notes (due in 2024) yesterday, for the purpose of refinancing A-Reit's existing borrowings. The issuance, which is expected to be completed by the end of this month, will extend the Reit's weighted average term of debt to 4.20 years from 3.49 years as at the end of the last financial year, with a weighted average borrowing cost of around 3.04 per cent.

Commenting on the outlook, Mr Tan said: "It's not as bad as imagined to be six months ago . . . We are not seeing businesses failing, and we are seeing renewals and rental growth. But it is still uncertain due to the many macro issues that continue to hang over Singapore and the rest of the global economy."

In the upcoming financial year ending March 31, 2013, the Reit has around 13.8 per cent of its revenue up for renewal, but the manager remains confident that the Reit will turn in a stable report card, barring unforeseen circumstance.