a-iTrust posts 3% climb in Q2 distributable income

ASCENDAS India Trust (a-iTrust) yesterday reported distributable income of $14.1 million for the second quarter ended Sept 30, up 3 per cent from $13.8 million a year ago.

Distribution per unit (DPU) for the three months rose to 1.85 cents, from the previous corresponding quarter’s 1.82 cents.

The trust, which owns business space in India, said that total property income for the quarter rose 2 per cent to $30.4 million, ‘despite the difficult business environment globally’.

Income held up as the trust was able to sustained an average occupancy of 97 per cent, or 98 per cent including committed leases.

Total property expenses, on the other hand, fell 20 per cent to $11.2 million on the back of lower operating, maintenance and security charges as a result of cost management (such as repackaging and retendering of contracts); and lower utilities expenses as the price of oil remained lower than a year ago. As a result, second-quarter net property income rose 22 per cent year-on-year to $19.2 million.

Gearing was 13 per cent as at Sept 30, 2009, compared with 9 per cent as at March 31, 2009. The increase was due to the additional borrowings taken to fund development projects.

Looking ahead, a-iTrust said that its performance will continue to be influenced by the performance of its tenants as well as conditions in the local property market.

‘a-iTrust’s net property income continued to grow despite the global downturn, because of the resilient demand for its properties and cost management,’ it said in a filing.

‘While the economic recovery remains fragile and uncertain, we will focus on what we can control – enhancing the competitive edge of our properties, strengthening relationships with our tenants, maintaining cost discipline, and seeking opportunities to invest in future growth.’

Simply Outstanding

• Results above expectations
• Attractive growth pipeline – 35% portfolio NLA growth over 2 years
• Buy for strong growth prospects, TP S$1.03

Results above expectations. Gross revenues were in line with expectations at S$30.4m (+13% yoy, 3% qoq) as a result of stable operational performance. The outperformance was due to higher than expected net property income (NPI) margins- 63% vs our estimated 57%. This was mainly because of lower operational costs through repackaging and renegotiation of its maintenance/security contracts and lower utilities expenses from lower oil prices. Distributable income came in at S$14.1m (+3% yoy), translating to a DPU of 1.85 Scts. For 1H10, AIT delivered a DPU of 3.91 Scts.

Moving NPI assumptions higher. We are adjusting our NPI margins higher to take into account the better than expected performance. As such, FY10F-11F DPU forecasts are adjusted upwards by 22% and 14% respectively.

Clear growth pipeline. Development of its 3 properties remains on track for completion by 2011, which will expand its portfolio by about 35% and result in a strong DPU CAGR of 9% over the next 2 years. In addition, its low gearing of c.13% as of 1H10 provides the trust with cS$180m (till 35% gearing limit) for opportunistic acquisitions.

Buy for growth, TP S$1.03. We find a-itrust’s DPU CAGR of 9% over FY10-12 to be attractive. In addition, opportunistic acquisitions that the trust could undertake, which are currently not factored into our forecasts, will remain further upside catalyst for stock price performance. Upgrade to BUY.

Ascendas India Trust’s Q1 DPU rises 25%

ASCENDAS India Trust (A-iTrust) is making a distribution per unit (DPU) of 2.06 cents for its first financial quarter ended June 30, 2009, up 25 per cent from the same quarter last year, said Ascendas Property Fund Trustee Pte Ltd, the trustee-manager of the Reit.

Cash generation remains strong, with distributable income at at $15.7 million for the latest quarter, registering a growth of 26 per cent from a year ago, it said.

Total property income for the quarter was $29.7 million, an increase of 4 per cent, while net property income was $18.3 million or 15 per cent higher.

The DPU of 2.06 cents for Q1 2009 represents an annualised yield of 12 per cent and 9.8 per cent respectively over the closing prices of $0.69 and $0.84 per unit on June 30 and July 29, 2009.

Gearing remained low at 9 per cent as at June 30, 2009.

‘The strong cash generation this quarter was made possible by the steady demand for space in our properties, as demonstrated by continued high portfolio occupancy of 97 per cent as at 30 June 2009,’ said Jonathan Yap, chief executive officer of the trustee-manager.

A-iTrust’s portfolio of 4.8 million sq ft of completed space is fairly evenly distributed among Bangalore, Chennai and Hyderabad.

The properties house 246 tenants operating in IT sub-sectors such as software development, business process off-shoring, research and development, and data centres.

Occupancy rate for the portfolio was 97 per cent as at June 30, 2009. During the quarter, only about 2 per cent of the portfolio’s leases expired, out of which half has been successfully renewed. About 10 per cent of space is due for renewal in the current financial year.

The Reit said that it aims to renew or replace expiring leases in advance. The strategy is to seek a balance between maximising lease renewals so as to lower leasing costs and enhancing tenancy quality and diversification by introducing new tenants.

Ascendas India Trust to pay 2.05 S’pore cents per unit for Q1

SINGAPORE: Singapore-listed Ascendas India Trust said it will pay 2.05 cents per unit for its fiscal first quarter. This was up 25 per cent over the same period a year ago.

All in, its first quarter distributable income to unit holders came to S$15.7 million. The rise was on the back of a 15 per cent increase in net property income to S$18.3 million for the three months ended June.

The manager of the trust said a key contributor to the results was the growth in property income despite the difficult business environment.

It added that income grew on the back of high occupancy rates and resilient rental rates.

Looking ahead, the property trust said it will continue to focus on retaining tenants, containing costs and seeking opportunities to invest in future growth.

However, it said its performance is tied to the performance of its tenants and demand for office space in Bangalore, Chennai and Hyderabad.