SINGAPORE (Oct 25): The manager of Ascendas REIT has announced a DPU of 3.887 cents for 2Q19, 4.2% lower compared to the DPU of 4.059 cents in 2Q18.
This was mainly due to lower contribution from Singapore, higher interest expense, and equity raised of $450 million in anticipation of the second UK portfolio acquisition and a Built-to-Suit development in Singapore.
For 2Q19, gross revenue improved by 1.1% y-o-y mainly due to contributions from newly acquired properties in Australia and the UK.
The key contributors were 100 Wickham Street and 108 Wickham Street in Brisbane, Australia acquired in 2017, and the portfolio of 12 logistics properties in the UK acquired in August.
Net property income declined 1.0% y-o-y mainly due to a one-off reversal of accrued operating expense in 2Q18.
Total amount available for distribution fell by 3.1% y-o-y to $115 million mainly due to additional interest expense.
During 2Q19, the manager completed $437.9 million worth of acquisitions in the UK and Australia.
As at Sept 30, the customer base of about 1,340 tenants is spread over 98 properties in Singapore, 35 properties in Australia and 12 properties in the UK.
The portfolio’s weighted average lease expiry (WALE) has improved to 4.3 years from 4.1 years in June 30 due to the long WALE of the newly acquired UK portfolio.
Overall portfolio occupancy rate remained stable at 90.6% compared to 90.5% at June 30.
Rental reversion of about +2.3% was achieved for renewed leases in multi-tenant buildings in Singapore during 2Q19. There were no multi-tenant building renewals in Australia and the UK.
As at Sept 30, aggregate leverage improved to 33.2% from 35.7% at June 30 following the equity fund raising on Sept 7. Weighted average all-in cost of borrowing was 3.0% compared to 2.9% at June 30.
The debt maturity profile remains well-spread and weighted average tenure of debt outstanding improved to 3.7 years from 3.4 years at June 30.
In its outlook, the manager of Ascendas REIT says global economic growth moderated in the first half of 2018. Potential escalation of trade tensions between the United States and China remains a key threat to the global outlook and interest rates are widely expected to continue rising in the months ahead.
Year to date, units in Ascendas REIT are down 6.2% to $2.58.
