DPU falls as equity base grows after fund-raising, occupancy slips
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported a net property income of $81.1 million for the second quarter ended Sept 30 - up 11.7 per cent from a year ago.
Distributable income also increased as a result, rising 15.4 per cent from the same period last year to $61.6 million.
But distributable income per unit (DPU) dropped as the unit base grew from equity fund-raising. A-Reit's DPU for Q2 came to 3.48 cents, down 13.2 per cent from 4.01 cents a year ago.
On a proforma basis, adjusting for the increased number of units, DPU for Q2 last year would have been 3.02 cents. This would mean a gain instead of 15.2 per cent.
For the half year ended Sept 30, A-Reit's net property income rose 13.7 per cent from a year ago to $161.8 million. Distributable income grew 16.6 per cent to $122.6 million.
The half-year DPU stood at 7.1 cents - 10 per cent less than the 7.9 cents a year ago. Again adjusting for new units issued, the proforma DPU last year would have been 6.09 cents, leading to a 16.6 per cent gain.
As at Sept 30, A-Reit's portfolio comprised 90 properties with a total asset value of about $4.7 billion. During the quarter, it completed two development projects - a facility at the Airport Logistics Park and the second phase of Plaza 8 Changi Business Park.
Due to the recession, A-Reit's portfolio occupancy rate slipped 0.3 of a percentage point from Q1 to 96.8 per cent in Q2.
But A-Reit managed to enjoy positive rental reversion for renewed leases at some properties. The rate of decline in new take-up rental rates also showed signs of moderation during the quarter, it said.
A-Reit's aggregate leverage ratio as at Sept 30 was 30.5 per cent, an improvement over the 41.4 per cent last year. New funds amounting to around $300 million from a private placement in August helped bring its gearing down.
DMG & Partners Securities analyst Jonathan Ng said in a report yesterday: 'We believe there is little need for management to further recapitalise its balance sheet, easing concerns that our forecast dividend yield would be diluted.'
A-Reit gained one cent to close at $1.94 yesterday.
Source: Business Times, 20 Oct 2009
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