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Ascott Residence Trust’s (Ascott Reit) revenue in Q1 2017 increased by five percent to S$111.3 million on an annual basis following its acquisition of Sheraton Tribeca New York Hotel in 2016, revealed an SGX filing on Friday (21 April).
At the same time, revenue per available unit (RevPAU) rose two percent to S$128 due to higher average daily rate from the recently acquired property, which continues to achieve an occupancy rate of more than 90 percent.
However, Ascott Reit’s gross profit dipped by three percent year-on-year to S$47.2 million during the quarter, while distributable income fell by eight percent to S$25.1 million. As a result, distribution per unit (DPU) declined by 14 percent to 1.51 cents in Q1 2017 compared to 1.75 cents a year ago.
But if it’s adjusted to exclude Ascott Reit’s equity placement in March 2016 to fund the purchase of Sheraton Tribeca as well as the contribution from the property, DPU for Q1 2017 would be higher at 1.64 cents
This would represent a four percent gain from a DPU of 1.57 cents in Q1 2016, if the figure for the previous quarter is adjusted to exclude the equity placement and the one-off net realised exchange gain of S$3 million arising from the repayment of foreign currency bank loans.
Previously, Ascott Reit issued 94,787,000 new units on the Singapore Exchange (SGX) in March 2016. The equity placement’s gross proceeds of S$100 million were used to fund the acquisition of the New York hotel.
Meanwhile, Ascott Reit’s manager revealed that it will use the proceeds from its recent rights issue, which was 182 percent oversubscribed, to finance the acquisition of Ascott Orchard Singapore, Citadines Michel Hamburg and Citadines City Centre Frankfurt, its first property in the German city.
“When the acquisitions of the German and Singapore properties are completed, they will increase Ascott Reit’s asset size to S$5.3 billion, reinforcing its position as the largest hospitality REIT in Singapore,” said Bob Tan, Chairman of Ascott Residence Trust Management Limited.
This article was edited by Denise Djong.
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