SINGAPORE (July 13): The manager of ESR-REIT, the former Cambridge Industrial Trust, has declared a DPU of 0.956 cents for the 2Q17 ended June, down 11.3% from 1.078 cents a year ago.
ESR Funds Management says 2Q17 gross revenue ended at $27.7 million, a decrease of 2.2% from a year ago.
Net Property Income (NPI) decreased 9.2% to $19.2 million due mainly to loss of revenue and resultant property operating expenses during the conversion of properties from single-tenanted to multi-tenanted, higher maintenance costs and property divestments in FY16.
Amount available for distribution for 2Q17 fell 11.4% to $12.5 million.
In 1H17, the manager reduced the number of ESR-REIT’s leases due for renewal in FY17 to 14.8%, a 6.7% reduction from 21.5% at the start of the year. Out of the five single-tenanted buildings with leases expiring in FY17, three have been renewed.
In June, ESR-REIT entered into an agreement to divest the property at 23 Woodlands Terrace for a consideration of $17.68 million.
ESR-REIT has also reduced its exposure to the Oil and Gas sector with the replacement of Tellus Marine, a master tenant at 21B Senoko Loop.
As at end June, ESR-REIT has a portfolio of 49 investment properties with a combined value of $1.36 billion. ESR-REIT’s gearing ratio was at 37.9%.
Adrian Chui, CEO of ESR Funds Management (S), says: “Although challenging business conditions continue to bring about a slowdown in the industrial property market, we are establishing the foundation for ESR-REIT’s next stage of development by employing a proactive asset and lease management strategy and exercising a prudent capital and risk management approach to our business.”
Units in ESR-REIT closed at 60 cents on Wednesday.
