ASCENDAS Real Estate Investment Trust (A-Reit) yesterday posted a net property income of $81.3 million for the third quarter ended Dec 31, 2009 – up 9.7 per cent from a year ago.
Higher gross revenue – boosted by rental income from newly completed development projects – and lower property expenses helped lift the industrial Reit’s earnings. As a result, distributable income rose 13.4 per cent to $61.2 million over the same period.
Despite this, distribution per unit (DPU) fell 19.3 per cent to 3.27 cents in Q3, from 4.05 cents a year ago. This reflected the larger unit base, partly due to A-Reit’s share placement and preferential offering exercises.
On a proforma basis, adjusting for the increased number of units, DPU for Q3 last year would have been 2.88 cents. Compared with the DPU in Q3 this year, there would have been a 13.5 per cent increase.
For the rest of this financial year, the manager ‘expects to be able to deliver a return that is in line with market expectations’.
As at Dec 31, A-Reit’s portfolio comprised 91 properties with a total asset value of about $4.8 billion. The occupancy rate for the portfolio was 96.5 per cent, down from 97.2 per cent at Dec 31, 2008.
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A-Reit still managed to secure positive rental reversion for renewed leases at its business and science parks, hi-tech industrial properties and logistics and distribution centres in the financial year to date.
‘However, the manager observed signs of moderation in the rate of positive rental reversion in line with current market rental trends,’ the Reit said.
A-Reit was also working on reducing its exposure to ‘vulnerable’ tenants. Its manager earlier identified 12,098 square metres of space as ‘vulnerable’. It has repossessed and re-let 2,416 sq m of space with no negative financial impact, and taken legal action against a tenant occupying 8,843 sq m.
As at Dec 31, A-Reit’s aggregate leverage stood at 31.2 per cent, sharply lower than the 42.2 per cent a year ago. It is in the process of refinancing a $300 million term loan facility maturing in March.
A-Reit units closed two cents lower at $2.02 yesterday.
Source: Business Times, 19 Jan 2010
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