SINGAPORE (April 25): The manager of Ascendas REIT reported DPU for the 4Q ended March rose 13% to 3.852 cents from a year ago, supported by higher net property income from new acquisitions and active cost management.
Ascendas REIT is Singapore’s first and largest listed business space and industrial real estate investment trust.
Total amount available for distribution rose 25.5% to $111.9 million while Net Property Income rose 54.7% to $131.5 million.
Gross revenue came in 2.4% higher at $208.9 million, mainly attributable to the full quarter contribution from ONE@Changi City which was acquired in March 2016 and contributions from the acquisition of the business park property in Coward Street, Sydney and 12, 14 and 16 Science Park Drive during FY16/17.
This was partially offset by the divestment of A-REIT City @ Jinqiao, Ascendas Z-Link and Four Acres Singapore during the year and the decommissioning of 20 Tuas Avenue and 50 Kallang Avenue for asset enhancement works.
For the full year, DPU grew 2.5% to 15.7 cents from a year ago.
Looking ahead, the manager says the REIT is faced with some headwinds. The Singapore economy is expected to grow at 1.0% to 3.0% in 2017.
With island-wide vacancy for industrial property at 10.5% as at December 2016, the incoming supply of about 2.4 million sq m of industrial space in 2017 will put further pressure on rental rates and occupancy.
Ongoing stringent subletting policies such as the requirement for an anchor tenant to occupy at least 70% of GFA for properties sited on JTC land, makes leasing more restrictive and selective.
The current trend is for the government to sell shorter leases of industrial land i.e. previously with a 60 year tenure to generally a tenure now of 30 years or less. The shorter land leases render the development of investment properties more challenging.
Units of Ascendas REIT closed 2 cents higher at $2.55.
