ESR-REIT recorded core distributable income per unit (DPU) of 0.8 cents for 1QFY2021 ended March, up 14.8% y-o-y from 0.697 cents, and up 8% q-o-q from 0.741 cents.
Total distributable income for 1QFY2021 grew 17.1% to $28.7 million from $28.5 million previously, according the REIT's 1QFY2021 business update.
The manager of ESR-REIT attributes the higher distributable income to the higher net property income (NPI) and lower borrowing costs.
NPI for the period grew 7.6% y-o-y to $44.1 million from $40.1 million previously, in line with higher gross revenue, which 4.4% y-o-y to $60.3 million in 1QFY2021 from $57.8 million the year before.
The higher gross revenue and NPI are mainly due to the absence of provision for Covid-19 rental rebates, which totalled $2.5 million in 1QFY2020, as well as lower property expenses on the back of lower electricity consumption and maintenance costs.
Portfolio occupancy was maintained at 90.8% for the quarter, with a weighted average lease expiry (WALE) of 2.9 years.
32 leasing transactions were signed for a total of 317,0000 square feet of space. This includes renewals for roughly 135,000 square feet, while the remaining 182,000 square feet were for new leases. Tenant retention stood at 87% as at March 31.
SEE: ESR-REIT eyes acquisitions overseas, AEIs at home
All-in cost of debt reduced to 3.52% per annum with a weighted average debt expiry of 2.7 years.
During the quarter, ESR-REIT completed asset enhancement initiative (AEI) works at ESR BizPark @ Changi, with the Temporary Occupation Permit (TOP) obtained on Mar 31.
Net asset value per unit improved q-o-q to 40.6 cents.
Looking ahead, ESR-REIT’s manager expects rental pressure in the industrial market in the short-to-medium term as supply from delayed completions during the pandemic come in for 2021 and 2022. In addition, the market will be dependent on economic recovery and international trade following the vaccination rollout.
Nonetheless, Adrian Chui, CEO and executive director of the manager notes that 1QFY2021 showed good leasing momentum and rental collections, which stood at 97%.
“Our core DPU has registered quarterly improvements since Singapore reopened its economy in 3Q2020. We will continue to improve our asset portfolio via AEIs and/or redevelopments, taking into consideration industrialists’ requirements, expectations and preferences to ensure that our portfolio remains future-ready,” he says.
Units in ESR-REIT close 0.5 cents or 1.25% higher at 40.5 cents on April 21.
