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ESR-REIT’s net property income (NPI) edged up by 1.2 percent year-on-year to $19.9 million in Q4 2017, but its gross revenue dipped 2.2 percent to $27.2 million, revealed an SGX filing on Wednesday (17 January).
At the same time, the trust’s distributable income declined by 6.2 percent to $12.2 million, while distribution per unit (DPU) fell by 6.7 percent to 0.929 cents.
For the whole of 2017, ESR-REIT’s gross revenue slid by 2.1 percent to $109.7 million on an annual basis, while NPI dropped by 4.7 percent to $78.4 million.
Last year’s gross revenue was slightly lower than 2016’s as the trust only partially benefited from the acquisitions of two industrial properties at 8 Tuas South Lane and 7000 Ang Mo Kio Ave 5 (7000 AMK) in December 2017.
Gross revenue and NPI were also dragged down by higher operating expenses from lease conversions of properties last year and in 2016.
“Last year has been a year of many ‘firsts’ for us. In the last quarter, we completed two acquisitions for a collective purchase consideration of approximately $346.1 million, with 7000 AMK being ESR-REIT’s largest transaction to date,” said Adrian Chui, CEO of ESR Funds Management (S) Limited.
“This resulted in a more than 28 percent increase in portfolio size and demonstrated our ability to recycle capital into high-valued assets. These two yield-accretive transactions have not only improved our overall portfolio quality, but also mark our inaugural acquisitions since ESR came onboard as our sponsor in January 2017,” he added.
As of 31 December 2017, ESR-REIT owns 48 properties across Singapore with a combined gross floor area of around 9.9 million sq ft and overall occupancy rate of 93 percent. These assets comprise business parks, light industrial, general industrial, logistics/warehouse and high-specs industrial.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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