Saturday, July 17, 2010

A-Reit posts 3.5% rise in Q1 distributable income

ASCENDAS Real Estate Investment Trust (A-Reit) has posted a 3.5 per cent rise in distributable income to $63.1 million for its first quarter ended June 30, up from $61 million a year earlier.

The period saw net property income climb 8.2 per cent year-on- year to $87.3 million and gross revenue up 10.9 per cent at $113.6 million.

But distribution per unit (DPU) for Q1 - which had a bigger unit base - fell 6.9 per cent to 3.37 cents, from 3.62 cents a year ago. The Q1 DPU was up 3.4 per cent compared with a proforma DPU of 3.26 cents a year ago, which included new units issued in the August 2009 placement, in lieu of base management fee in December 2009 and June 2010 and for payment of acquisition fee in June 2010.

Net property income growth could have been higher if not for higher operating expenses attributed to the enlarged portfolio, higher utilities expenses, and the end of land rent rebates given by the government in 2009.

'We are pleased to commence the financial year with a 10.9 per cent growth in gross revenue contributed mainly by the larger portfolio base from a year ago,' said Tan Ser Ping, chief executive officer of A-Reit's manager, Ascendas Funds Management (S) Limited.

Occupancy rate for the portfolio in Q1 has remained stable at 95.6 per cent.

Also, rental reversion on lease renewal continued to be positive for the Business & Science Parks and Hi-Tech Industrial properties in the first quarter.

Jonathan Ng from DMG & Partners Research said: 'We maintain our FY11 DPU forecast of 13.7 cents as dividends are well supported by the long-term leases.'

A-Reit is currently developing a partial built-to-suit business park facility in Changi Business Park for Citibank.

As at June 30, 2010, A-Reit's portfolio consists of 92 properties and a total asset value of about $4.9 billion.

A-Reit's manager aims to at least maintain the previous financial year's level of net income for FY2010/11.

The counter closed two cents higher yesterday at $2 per share.

Source: Business Times, 17 Jul 2010

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