AscottREIT – BT
Ascott Reit’s Q4 distributable income falls 20%
ASCOTT Residence Trust (ART) yesterday announced a distributable income of $10.32 million for the fourth quarter of 2008, a fall of 20 per cent from the previous corresponding period’s $12.85 million because of one-off expenses.
The one-off expenses amounting to about $1.7 million related mainly to a refurbishment cost. ART said that excluding this one-off item, distribution could have been just 6 per cent lower due to higher finance costs.
Distribution per unit (DPU) for the quarter also fell 20 per cent year-on-year, to 1.69 cents.
For its serviced residences, the Pan-Asian residence real estate investment trust registered a 4 per cent year-on-year in revenue per available unit (RevPAU) to $133 for the three months ended Dec 31, 2008. This was mainly because demand for serviced residences in China saw a fall after the Beijing Olympics.
For the full year, distributable income was 19 per cent better at $53.7 million. As Ascott Residence Trust Management Limited (ARTML) chief executive Chong Kee Hiong said of ART’s FY2008 performance, ‘everything is still up’. ARTML, the trust’s manager, is a subsidiary of CapitaLand.
DPU for the full year rose 14 per cent to 8.78 cents, a distribution yield of 17.4 per cent based on ART’s closing price of 50.5 cents per unit on Thursday.
The higher distribution was due to strong operating performance in 2008, a result of organic growth as well as contributions from new acquisitions.
However, rental income might decrease the coming year, as Mr Chong expects tenants to renew on shorter terms. ‘It is quite clear that people are renewing for shorter stays, and the average length of stay will drop.’
Revenue for the quarter came to $47.7 million, 11 per cent higher year-on-year. Full-year revenue was $192.4 million, a 24 per cent increase. Upon completion of its latest acquisition in Vietnam, ART’s portfolio will expand to 38 properties worth $1.53 billion in 11 cities.
Mr Chong said: ‘We will continue to apply cost containment measures as well as control our discretionary capital expenditure to maximise asset yield.’
ART expects its operating performance in 2009 to ‘remain profitable but lower than 2008’.