SINGAPORE (Oct 30): The manager of Ascott Residence Trust has reported a 5% rise in distribution per unit (DPU) to 1.91 cents for the 3Q19 ended September, from 1.82 cents a year ago.
Unitholders’ distribution for 3Q19 grew 6% to $41.6 million, led by a one-off partial distribution of a $4.0 million gain from the divestment of Ascott Raffles Place Singapore in May 2019.
3Q19 revenue dipped 2% to $132.4 million due to the absence of revenue contribution from Ascott Raffles Place Singapore as a result of the divestment.
Gross profit edged up by 1% to $65.0 million in 3Q19, mainly due to the adoption of a new accounting standard.
The manager notes that gross profit for Belgium and Spain jumped 29% and 13% respectively on the back of strong leisure demand, while its properties in Vietnam and the UK also saw higher demand.
About 40% of the gross profit for 3Q19 was contributed by stable income from properties on master leases and properties on management contracts with minimum guaranteed income.
As at end-September, cash and cash equivalents stood at $385.4 million, with its gearing at 33%.
Looking ahead, the manager says the proposed combination of Ascott REIT and Ascendas Hospitality Trust received strong approval of over 99% of the votes from unitholders at the respective extraordinary general meetings and scheme meetings held on Oct 21.
See: Ascott Residence Trust, Ascendas Hospitality Trust get over 99% approval from unitholders for proposed combination
The combined entity, which will continue to be named Ascott Residence Trust, will be world’s eighth largest hospitality trust with an asset value of $7.6 billion.
Subject to relevant approvals, the proposed combination is expected to complete by the end of 2019. The new Ascott REIT-Business Trust stapled units under the combined entity are expected to commence trading on the Singapore Exchange on Jan 2, 2020.
“With a debt headroom of about $1.1 billion, we have the capacity to pursue yield-accretive acquisitions, development and conversion projects,” says Beh Siew Kim, CEO of the manager.
“Post-combination, we will continue to have the mandate to acquire lodging assets in any part of the world. Besides Asia Pacific, we will also keep a lookout for quality assets in Europe and the USA,” she adds. “Post-completion of Ascott REIT’s combination with A-HTRUST, we will review the combined portfolio to assess opportunities for asset enhancements to maximise returns.”
Beh also notes that lyf one-north Singapore, Ascott REIT’s maiden development project and co-living property, is on track to open in 2021.
As at 9.17am, units in Ascott REIT are trading 1 cent lower at $1.41.
