ASCOTT Residence Trust (Ascott Reit) said that third- quarter unit-holders’ distribution fell 25 per cent to $11.8 million from $15.9 million a year ago as it saw weaker demand for its serviced residences in Singapore and China.
Distribution per unit (DPU) was 1.92 cents for the quarter ended Sept 30, 2009, down 26 per cent from 2.61 cents in Q3 2008.
‘The lower performance as compared to Q3 2008 was a result of the global economic slowdown, increased competition from new supply in Beijing and Shanghai, and the strong performance in August 2008 due to the Beijing Olympics,’ said the real estate investment trust (Reit) in a statement. Revenue per available unit, or RevPAU, fell 24 per cent year-on-year to $124 in Q3 2009. The reduction in RevPAU was due to reduction in both average daily rates as well as occupancies at the group’s serviced residences. Revenue for Q3 2009 fell 17 per cent to $44.4 million.
The trust’s management said, however, that the challenges posed by the global economic downturn to the hospitality industry eased somewhat in Q3 2009 compared to Q2.
‘Our Q3 operating performance has shown further signs of stabilisation in hospitality demand,’ said Lim Jit Poh, the trust’s chairman. ‘While we remain cautious over the pace and extent of recovery, we are confident of the longer-term growth in the markets in which we operate.’ On a sequential basis, unit-holders’ distribution and DPU were 7 per cent higher than Q2’s $11 million and 1.79 cents respectively.
Ascott Reit’s portfolio operating performance also improved in Q3 over Q2, led by RevPAU growth in Japan, Singapore and China of 24 per cent, 15 per cent and 7 per cent respectively.
To ride on the expected upturn in demand as the economy recovers, Ascott Reit has accelerated its asset enhancement initiatives for selected properties. It will also continue to seek yield-accretive acquisitions, it said. The company’s shares fell 2 cents, or 1.8 per cent, to $1.07 yesterday.
Source: Business Times, 29 Oct 2009