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Ascott Residence Trust registered a nine percent increase in distribution income, which stood at S$35.0 million in Q2 2016, the trust said in a press release Wednesday (20 Jul). The REIT’s distribution per unit (DPU) also climbed two percent to 2.13 cents.Revenue jumped 21 percent to S$119.4 million, while gross profit rose 17 percent to S$57.9 million. Revenue per available unit (RevPAU) also increased 10 percent to S$142.
At the same time, the trust’s revenue jumped 21 percent to S$119.4 million, while gross profit rose 17 percent to S$57.9 million. Revenue per available unit (RevPAU) also increased 10 percent to S$142.
For 1H 2016, revenue and gross profit increased 19 percent and 15 percent to S$224.9 million and S$106.4 million respectively. DPU rose one percent to 3.88 cents while RevPAU climbed 10 percent to S$134.
Ascott Residence Trust Management Limited’s (ARTML) chairman Lim Jit Poh attributed the double-digit growth in revenue to last year’s S$609 million acquisition and the recent S$218 million purchase of Sheraton Tribeca New York Hotel.
Aside from propelling Ascott REIT into a global hospitality player, the two US acquisitions also boosted the trust’s asset size to around S$5.0 billion, he said.
ARTML’s chief executive officer Ronald Tay revealed that Japan emerged as the trust’s top performing market during the quarter, with RevPAU increasing nine percent due to stronger demand from leisure travellers for its serviced residences.
“Spain also saw a four percent growth in RevPAU because of higher demand from leisure travellers at Citadines Ramblas Barcelona,” he said.
Commenting on Brexit, Tay noted that Ascott REIT’s portfolio in Europe is well-diversified across the UK, France, Germany, Belgium and Spain. In fact, its London assets only account for 10.2 percent of its total gross profit for 1H 2016.
“Our London properties are on management contracts with a minimum guaranteed income, giving Ascott REIT a stable income,” said Tay.
“We are closely monitoring the situation, keeping in mind that the formalisation of Brexit will take at least two years. While businesses may reduce corporate travel as they evaluate their options, we expect an increase in leisure travellers if the pound continues to remain affordable.”
Looking ahead, Lim said the trust will “continue to seek accretive acquisitions in gateway cities in markets such as Australia, Japan, Europe and the U.S. to enhance our portfolio and achieve our target asset size of S$6 billion by 2017.”
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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