ESR-LOGOS REIT has reported a distribution per unit of 1.54 cents for 2HFY2022 ended Dec 2022, up 7.5% y-o-y. This brings full year distribution to 3 cents, versus 2.987 cents paid for FY2021.
Net property income for 2HFY2022 was $141.5 million, up 64% y-o-y, while revenue was up 61% y-o-y to $195.6 million. The growth was driven by contributions from ALOG Trust. The two entities merged last April.
“During the year, we continued to advance our strategy to solidify ELOG’s position as a leading New Economy and future-ready APAC S-REIT,” says Adrian Chui, CEO of the REIT manager.
“Despite the uncertainties and challenges posed by the impact of high inflation, rising interest rates and geopolitical tensions, we continue to stay prudent in our risk management strategies and were able to deliver stable growth both operationally and financially,” says Chui.
“Leveraging on the continued tailwinds of economic structural trends, we continued to rejuvenate E-LOG’s portfolio towards in-demand, scalable and quality New Economy assets,” he adds.
As at December 31 2022, E-LOG has a portfolio of 82 properties with a total gross floor area of 2.3 million sqm. The so-called new economy assets of logistics and high-specs properties accounted for 62.8% of the total portfolio.
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The REIT notes that its portfolio occupancy remained high at 92.7%.
As at Dec 31 2022, the REIT’s weighted average lease expiry was 3.2 years, compared to 2.7 years as at Dec 31 2021.
As at the end of FY2022, E-LOG’s gearing stood at 41.8%, while 72% of its interest rate exposure is fixed with a weighted average fixed debt expiry of 2 years as at Dec 31 2022.
E-LOG’s debt expiry profile remains well spread out with weighted average debt expiry at 2.9 years and all-in cost of debt of 3.66% per annum. At the end of FY2022, E-LOG had a debt head room of $858.8 million and access to $320.4 million of committed undrawn revolving credit facilities.
Going forward, Chui sees a “multitude” of existing macro challenges carrying into this year, with recession “setting” into US and Europe.
“Supply chain disruptions and continued interest rate hikes will affect economic sentiments, trade, financial and economic activities which will impact demand for space, rental growth, and operating costs for E-LOG,” he adds.
On the other hand, US inflation is seen to slow and as such, the pace of rate hikes too. Also, China’s reopening should help ease the supply chain disruptions.
In addition, the depth and pace of the economic structural trends is expected to continue furnishing the tailwinds for E-LOG. For example, ensuring food security and MNCs move towards improving supply chain resilience by expanding logistics capabilities as part of their “Just-In-Case” or “JIC” manufacturing process is expected to drive demand for E-LOG’s logistics properties, says Chui.
The Manager will continue to actively review and undertake asset management strategies to reposition identified properties to address the needs of industrialists and emerging segments (eg, cold storage facilities) to grow together with our tenants,” he adds.
ESR-LOGOS REIT closed Jan 30 at 38 cents, unchanged for the day, and down 11.63% over the past year.
