ART – BT

ART Q2 distributable income climbs 9.6%

Trust cites organic growth, acquisitions for better results

ASCOTT Residence Trust (ART) said yesterday its second-quarter distributable income climbed 9.6 per cent to $13.3 million, from $12.1 million a year ago.

Distribution per unit was 2.19 cents, an increase of 9 per cent from 2.01 cents in Q2 last year.

The trust said its better performance was due to organic growth across its portfolio – particularly in Singapore and Vietnam – and contributions from properties acquired in the past 12 months.

Revenue for Q2 ended June 30 rose 13.3 per cent to $46 million, from $40.6 million in Q2 2007. In Singapore, revenue per available unit rose some 30 per cent from last year.

For the first six months of 2008, distributable income rose 36.1 per cent to $27.5 million. Distribution per unit rose 25.6 per cent to 4.52 cents. Revenue for the half-year rose 31.6 per cent to $91.6 million.

ART intends to increase its investment in emerging markets such as China, Vietnam and India, said Chong Kee Hiong, chief executive of the trust’s management team. ‘If you look at the current environment, I would say the opportunities are in emerging markets,’ he said.

Right now, the trust has 50 per cent of its $1.5 billion portfolio in emerging markets. Mr Chong said he wants to increase the proportion to 60-70 per cent in the longer term. ART owns 3,550 apartments in 37 properties across seven countries.

The trust said the global financial turmoil triggered by the sub-prime crisis and tighter credit had some effect on the Asian hospitality industry in the first half of this year.

‘Should these factors persist, there will be further impact on business travel patterns to the markets we operate in, although the group’s geographical diversity and extended stay business model allow it to mitigate these factors,’ it said.

The trust’s units rose two cents to close at $1.12 yesterday. The units have shed 22.8 per cent since the start of the year.