The manager of ARA LOGOS Logistics Trust (ALOG) has posted distribution per unit (DPU) of 1.353 cents in the 1QFY2021 ended March, 35.7% higher than DPU of 0.997 cent in the 1QFY2020.
The quarter’s DPU was spread across 1.28 billion units issued in the REIT, compared to 1QFY2020’s 1.09 billion units.
The significantly higher growth was partly due to the retention of the $2.5 million distributable income retained in 1QFY2020.
An advanced DPU of 1.563 cents for the period from Jan 1 to April 15 will be distributable to unitholders on May 28.
On a like-for-like basis, excluding capital distributions in this quarter, and including the retained distributable income from 1QFY2020, DPU for the 1QFY2021 would have been 6.6% up y-o-y at 1.307 cents.
1QFY2021 gross revenue grew 8.2% y-o-y to $31.1 million, while net property income (NPI) increased 8.7% y-o-y to $23.9 million.
The higher figures were underpinned by strong portfolio performance due to the commencement of new leases at several properties, as well as higher revenue generated on the back of the stronger Australian dollar.
Distributable income for the quarter was up 59.3% y-o-y to $17.3 million.
SEE:Rising logistics demand keeps ARA Logos Logistics Trust a 'buy': RHB
As at March 31, the REIT’s total leverage stood at 37.4%. All-in financing costs improved to 3.09% from the 3.22% as at Dec 31, 2020.
About 89.4% of ALOG’s distributable income is derived in Singapore dollars or hedged to reduce foreign currency risk.
As at March 31, the REIT’s portfolio occupancy of 99.1% with a weighted average lease expiry (WALE) of 2.8 years by net lettable area (NLA) or 2.7 years by gross rental income (GRI).
The REIT secured some 145,500 spanning 0.6 million sq ft of new leases during the quarter. It posted 0.9% rental reversion for the 1QFY2021.
Its top 10 tenants – comprising mainly high-quality multinational businesses in the logistics/supply chain and other sectors including transportation and construction – make up some 48.3% of ALOG’s GRI.
The manager says it has embarked on a series of asset enhancement initiatives (AEIs) such as toilet upgrading works and repainting works to keep its portfolio competitive. The costs of these AEIs are estimated to cost the REIT some $5.1 million.
“Our stronger 1QFY2021 performance has once again continued to demonstrate the resilience of the logistics sector and defensiveness of ALOG’s portfolio. In addition, we have also made significant strides during the quarter,” says Karen Lee, CEO of the manager.
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“Besides the completion of the acquisition of four logistics assets and 49.5% and 40.0% interest in the New LAIVS Trust and Oxford Property Fund respectively from our sponsor, LOGOS, we have unlocked further value through the divestment of ALOG Changi DistriCentre 2 in Singapore. With the proceeds generated from the divestment, we will continue to be disciplined in our strategy and redeploy the capital into building a more defensive portfolio to generate long-term sustainable returns for our unitholders,” Lee adds.
According to JTC's quarterly report in 1Q2021, leasing momentum for warehouses was stable during the quarter. Vacancy rates in 1Q2021 have also remained low. The warehouse segment has continued to see strong demand from third-party logistics, e-commerce and food logistics segments.
In Australia, the recovery of the country's economy is said to be "well under way" according to the Reserve Bank of Australia (RBA). An expected above-trend growth is likely to be seen in 2021 and 2022.
Units in ALOG closed flat at 74.5 cents on April 22.
