The manager of Ascendas REIT (A-REIT) has reported distribution per unit (DPU) of 7.66 cents for 1HFY21 ended June, a 5.4% increase from the DPU of 7.27 cents disbursed in the previous year.
This follows a 12.2% increase in the number of units for the computation of DPU to 4.2 billion in 1HFY21, compared to the 3.6 billion registered in 1HFY20.
The total income available for distribution came in at $311.0 million in 1HFY21, an 18.2% jump from the $263.2 million seen in 1HFY20.
Gross revenue for the first six months of the year was up 12.4% y-o-y to $586.0 million thanks to contributions from: two office properties in San Francisco which were acquired in November, 11 data centres scattered across Europe that were acquired in March as well as two suburban offices in Australia that were acquired in September 2020 and January.
A-REIT also acquired the remaining 75% stake in Galaxis, a business park property located above the one-north MRT station in Singapore for $534.4 million.
Overall, the REIT’s acquisitions in 1HFY21 amounted to $1,723.0 million.
The income from these acquisitions helped to offset the absence $10.3 million received from the government in the form of Covid-related grants in 1HFY20, A-REIT highlights in its results announcement on Aug 2.
Its net property income correspondingly rose by 14.8% y-o-y to $445.6 million, in tandem with the increase in gross revenue.
In this time, its property expenses – comprising property service fees, property taxes and other expenses such as maintenance and conservancy costs, utilities and marketing fees - edged up by 5.4% to $140.4 million.
A key contributor to this was the addition of the new assets in San Francisco, Europe and Australia.
“Despite the uncertain business environment due to Covid-19, we were able to acquire $1.2 billion of overseas properties comprising 11 data centres in Europe ($904.6 million) and a suburban office in Australia ($284.0 million) in 1HFY21 given our strong financial position,” notes William Tay, CEO and executive director of A-REIT.
Following the acquisitions, A-REIT’s total portfolio value grew by some 15.7% since Dec 31 2020, to hit $15.9 billion on June 30.
The manager also undertook asset enhancement initiatives (AEIs) amounting to $15.8 million for two properties in 1HFY21. The facilities are at 25 Changi South Avenue 2 in Singapore and 100 & 108 Wickham Street in Brisbane, Australia.
Ongoing projects include two AEIs worth $18.8 million (Changi Logistics Centre and Hansapoint) and two redevelopment projects worth $119.3 million (UBIX and iQuest@IBP) in Singapore.
With a contribution of $9.8 billion, Singapore accounts for 62% of the portfolio. The remaining 38% comes from properties in Australia (14% or $2.2 billion), the US (13% or $42.1 billion) and the UK/Europe (11% or $1.8 billion).
As at June 30, the REIT had 1,520 tenants scattered across its properties ranging from business spaces, logistics and distribution centres, industrial properties and data centres.
On a q-o-q basis, portfolio occupancy rate improved to 91.3% in June (from 90.6% in March), following improvements in its Singapore and Australia portfolios.
The occupancy rate of the Singapore portfolio was at 87.9%, thanks to the full occupancy achieved at its 31 Joo Koon Circle space which was vacant on Mar 31.
Similarly, the occupancy rate of the Australian portfolio was at 95.8% in end June, mainly due to a new lease secured at 1 Distribution Place in Sydney
A-REIT’s portfolio occupancy rates for the US and UK/Europe remained stable at 92.8% and 98.2% respectively.
Overall, the REIT’s average rental reversion for the portfolio was +6.4% in 1HFY21.
In 2QFY21, it recorded positive average rental reversion for 8.9% of the leases that were renewed in multi-tenant buildings. This is up from the +3.0% seen in 1QFY21.
The average rental reversion was +3.4% for Singapore and +26.3% in the US in 2QFY21.
With this, the portfolio’s weighted average lease expiry (WALE) stands at 4.0 years with only 5.8% of its gross rental income due for renewal in 2HFY21.
As at June 30, A-REIT’s cash and cash equivalents stood at $309.3 million a slight shrink from the $361.3 million at end 1HFY20.
Going forward, Tay believes that A-REIT is well placed to benefit from the key trends of digitalisation and e- commerce, given that business spaces, logistics and data centres now making up 80% of its portfolio.
The latest addition to its portfolio is the built-to-suit business park property that will house the headquarters of Grab. Located at one-north, the property was handed over to the ride hailing platform operator on July 30, and is fully leased for 11 years.
Shares in A-REIT closed flat at $3.12 on Aug 2, before its results announcement.
