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Ascendas Real Estate Investment Trust’s (Ascendas Reit) net property income (NPI) rose 3.8 percent year-on-year to $159.2 million during the first quarter ended 30 June 2018.
The higher NPI was mainly due to contributions from newly acquired properties, namely 100 Wickham Street and 108 Wickham Street in Brisbane, Australia as well as redeveloped property 50 Kallang Avenue in Singapore.
“Lower property operating expenses (-4.2 percent year-on-year) also contributed to the higher NPI as property tax expense was reduced due to retrospective downward revisions in the annual value of certain properties,” said Ascendas Reit in an SGX filing.
Gross revenue climbed 1.5 percent year-on-year to $216.6 million, while the amount available for distribution fell 1.0 percent year-on-year to $117.3 million as a result of the one-off distribution made in Q1. With this, distribution per unit dropped 1.2 percent to 4.002 cents.
During the quarter, Ascendas Reit expanded its footprint in Australia via the acquisition of two freehold logistics properties in Melbourne for A$50.2 million (S$50.9 million). It also announced its first foray into the UK with the proposed acquisition of 12 logistics properties for £207.27 million (S$373.15 million).
With its diversified portfolio having a weighted average lease expiry of around 4.1 years, Ascendas Reit achieved an overall occupancy rate of 90.5 percent in Q1, down from the 91.5 percent posted during the previous quarter.
Rental reversion stood at about +10.5 percent for renewed leases in multi-tenant buildings in Singapore.
“Based on new leases signed, tenants from the transport and storage sector accounted for the largest proportion of new demand by gross revenue in Q1 FY18/19 (46.7 percent),” it said.
Looking ahead, Ascendas Reit noted that while global economic growth has become more broad-based with the strengthening of global trade and industrial production, it expects the escalating trade tensions between China and the US to pose a risk to the global outlook.
In Singapore, it expects the industrial property market to go through a gradual recovery, on the back of the tapering of new industrial property supply and healthy macro-economic data. But despite the improved leasing enquiries seen in recent months, Ascendas Reit noted that businesses remain cautious, with some consolidating and right-sizing.
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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