SINGAPORE (Apr 24): ESR Funds Management, the manager of ESR-REIT, has declared a 1Q19 DPU of 1.007 cents, 18.9% higher than 0.847 cents in 1Q18.
Amount available for distribution increased 138.1% to $32.0 million from $13.4 million in the previous year.
Gross revenue for the first quarter ended March came in at $64.8 million, 92.9% higher than $33.6 million last year, mainly attributed to the contributions from the acquisition of 15 Greenwich and Viva Trust’s nine properties pursuant to the merger in Oct 2018; the leasing up of 30 Marsiling and 3 Pioneer Sector 3; and rental escalations from the existing property portfolio.
The growth was partially offset by the lease conversion from single to multi-tenancy for 16 Tai Seng (2Q2018) and 5/7 Gul Street in 1Q2019.
With property expenses increasing 64.9% y-o-y to $16.2 million, net property income came in at $48.6 million, double that of $23.8 million recorded in 1Q18.
Non-property expenses was 126.2% higher y-o-y at $19.7 million, due mainly to an increase in manager’s fees, trust expenses, borrowing costs, finance costs on lease liabilities for leasehold land, as well as the adoption of FRS 116, which was not recorded in the previous year.
Hence, the REIT’s earnings for 1Q19 came in at $30.7 million, 116.0% higher than $14.2 million last year.
As at Mar 31, the REIT’s portfolio comprises 57 properties across Singapore, with a total gross floor area of approximately 14.1 million square feet, across the following sub-asset classes: Business Parks, High-Specs Industrial, Logistics/Warehouse and General Industrial.
Portfolio occupancy for 1Q2019 remained healthy at 92.0%, while tenant retention rate was 53.8%. Rental reversions are positive at 1.6% for 1Q19.
Adrian Chui, CEO and executive director of the manager, says, “During this quarter, we continued on our plans to carry out rejuvenations and AEIs for several identified assets to ensure our portfolio is ‘future-ready’ to meet the growing and changing demands of the ‘industrialists of tomorrow’. This is especially pertinent amidst an increasingly stable industrial market supply environment. However, we remain cautious due to uncertainties surrounding the ongoing global trade tensions resulting in risk-averse behaviour amongst industrialists on the demand side. Going forward, we will continue to sustain the momentum on portfolio rejuvenation to optimise value from the assets.”
Units in ESR-REIT last traded at 50 cents on Tuesday.
