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Ascendas Real Estate Investment Trust (A-REIT) saw its distribution per unit for Q3 FY2016 increase 9.9 percent to 3.95 cents from 3.59 cents in Q3 FY2015.
This came after distributable income jumped 11.7 percent to S$96.6 million from S$86.4 million previously. Gross revenue increased 12.9 percent to S$193.8 million, while net property income soared 24.1 percent to S$142.2 million.
“In the third quarter, we announced acquisitions worth approximately S$1.5 billion in Australia and Singapore. The acquisitions comprising 27 freehold logistics facilities in Australia and a business park property in Singapore are aligned with our strategy to build a high quality and diversified portfolio to deliver sustainable returns for our Unitholders,” said Tan Ser Ping, chief executive and executive director of the Reit manager.
Occupancy rates for the overall portfolio improved to 89.2 percent as at end-December 2015, mainly due to high occupancy of 94.4 percent achieved by the recently acquired Australian logistics property portfolio.
Singapore portfolio occupancy, however, dipped to 88.9 percent mainly due the completion of a new block at 40 Penjuru Lane (Logistics).
Nonetheless, positive rental reversion of 7.3 percent was achieved across all segments of its Singapore portfolio.
A-REIT’s gearing stood at 37.3 percent and “is expected to remain at this level after the preferential offering and funding of ONE@Changi and 6-20 Clunies Ross Street,” said Credit Suisse.
“Borrowing cost was stable at 2.72 percent while the proportion of fixed debt rose by 1.7 percentage points quarter-on-quarter to 73.8 percent.”
With this, the swiss financial institution maintained its an outperform rating for A-REIT.
“We believe occupancies have bottomed while rent reversions should stay strong for the rest of FY2016 and the Australia portfolio will support growth given its fixed annual increments,” it said. “AREIT offers FY2016 yield of 7.2 percent,” it added.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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