Ascendas REIT (A-REIT) reported a dip in portfolio occupancy for the 1QFY2021 ended March to 90.6% from 91.7% as of the 4QFY2020.
Rental reversion remained positive and was slightly higher at 3% for the 1FY2021, compared to 2.5% previously.
The REIT did not release its figures for gross revenue, net property income or distributable income for the 1QFY2021.
The lower portfolio occupancy followed lower occupancy rates for all its geographies with the exception of the UK and Europe.
For its Singapore portfolio, which comprises over 62% of its total gross floor area, portfolio occupancy declined to 86.9% for the 1QFY2021 from 88.4% in the 4QFY2020.
This was primarily contributed by non-renewals at TÜV SÜD PSB Building, which is up for redevelopment.
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The REIT completed acquisitions for 11 data centres in Europe as well as an office asset in Sydney during the quarter, for a total cost of $904.6 million and $284 million respectively.
The REIT has another $251.2 million worth of Australian logistics and office acquisitions in the pipeline that’s expected to complete across 2021 and 2022.
Average leverage stood at 38% as of Mar 31, up from 32.8% as of Dec 31, 2020.
The REIT’s weighted average lease expiry (WALE) for its portfolio stood at 4.1 years
In its market outlook, the REIT notes that “many risks and uncertainties remain” as new strains of the virus and diverging economic recoveries across countries may impede recovery.
Demand in Singapore is expected to remain subdued as companies are likely to stay cautious amidst the lingering global while excess supply in industrial property may affect rental growth.
However, the REIT highlights it will continue to have access to its sponsor’s pipeline of business & science park properties.
For its other markets, the REIT expects its Australian portfolio to continue delivering stable performance, while its UK and Europe portfolio is expected to get a boost from the new data centres as digitalisation accelerates, providing steady long-term returns.
Its US portfolio, concentrated in tech-centric cities like San Francisco, is anticipated to benefit from growing tech and health sectors.
“Our priority is to keep building a stronger and profitable portfolio for the longer term. Ascendas Reit’s strong financial profile allows us to seize good opportunities to grow. We will maintain our long-standing strategy of diversifying across multiple developed countries and asset classes,” the REIT’s manager states.
Shares in A-REIT closed 1 cent or 0.32% higher at $3.11.
