SINGAPORE (Aug 13): ESR-REIT announced 2Q18 DPU increased by 4.7% to 1.001 cents from 0.956 cent in 2Q17 on higher net property income (NPI) and distributions from gains relating to past divestments.
With the 2Q18 distribution, 1H18 DPU came in at 1.848 cents, 5.7% lower than 1.960 cents in 1H17.
Total amount distributable for 2Q18 increased by 27.1% to $15.8 million from $12.5 million in the previous year.
Gross revenue for the quarter was 17.6% higher at $32.5 million from $27.7 million a year ago, attributable to the full quarter contributions from 8 Tuas South Lane and 7000 Ang Mo Kia Avenue 5 (7000 AMK), as well as rent escalations from several properties.
This was partially offset by revenue reduction from the master lease conversion of property at 16 Tai Seng, 21B Senoko Loop and 3 Pioneer Sector 3 to multi-tenancy, expiries and non-renewal of leases at three properties and the absence of revenue from four divestments completed since 2Q17.
As property expenses increased by 7.7% y-oy to $9.10 million, NPI came in at $23.4 million, 22.0% higher than $19.2 million last year.
During the quarter, the REIT also recorded $1.8 million in distribution from other gains, which was absent in the same period last year.
As at June 30, the REIT’s portfolio comprises 47 properties across Singapore, with a tenant bas of 197 tenants and a total gross floor area (GFA) of about 9.7 million sq ft.
Adrian Chui, CEO and executive director of the REIT’s manager says, “As part of our long-term plans, as we continue to rejuvenate and unlock value from our existing portfolio, we continue to look at investment opportunities that support our pursuit of building a more balanced, modern and resilient portfolio. Our proposed acquisition of 15 Greenwich Drive and the proposed merger with VIT are part of this plan.
“To position for this, we have also taken a proactive approach to capital management by engaging with various capital providers to provide us with adequate committed lines and maintaining gearing at the lower end of the range which enables us to exercise financial flexibility moving forward,” adds Chui.
Units in ESR-REIT last traded at 51 cents on Friday.
