Source : Business Times - 19 Jul 2008
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported net distributable income of $51.8 million for the first quarter ended June 30, 2008 - 15.9 per cent higher than for the corresponding period last year.
This follows a 19.6 per cent growth in gross revenue from the year-ago period to $92.5 million. The increase was due mainly to additional rental income from completed acquisitions and a development project.
The distribution per unit (DPU) for the quarter is 3.89 cents, up 15.4 per cent from the year-ago period. The DPU, to be paid out on Aug 27, represents an annualised yield of 7 per cent based on the closing price of $2.21 per A-Reit unit on June 30.
A-Reit had 86 properties with a total book value of around $4.5 billion as at June 30. Acquisitions in Q1 comprised 8 Loyang Way 1 for $25 million and 31 International Business Park for $246.8 million.
The portfolio’s overall occupancy rate stood at 98.6 per cent, against 97.2 per cent a year ago. For the business and science park and hi-tech industrial properties, renewal rates rose 63.9 per cent and 44.4 per cent respectively versus preceding contract rates.
This is due to ‘the continued healthy demand for quality suburban industrial and business space as well as the active leasing and investment activities conducted by the manager and its property management team’, said A-Reit manager Ascendas Funds Management (S)’s CEO and executive director Tan Ser Ping.
A-Reit’s weighted average borrowing cost for the portfolio was 3.16 per cent. To diversify funding sources, it recently took on a three-year committed revolving credit facility for $200 million, and is also incorporating a medium-term notes issuance facility.
Citing a CB Richard Ellis study, A-Reit said yesterday that rents and occupancy rates for hi-tech and business park space could continue to increase, but at a slower pace.
A-Reit also mentioned that it is difficult to gauge how much the Asian economy could be hit by the possible US recession and global inflationary pressure.
‘Despite the cautious outlook for the economy and barring any unforeseen events, the manager expects to be able to deliver, for the coming year, a DPU that is in line with its recent performance,’ A-Reit’s release stated.
The release also said that the A-Reit manager remains committed to pursuing quality and sustainable yield accretive investments, and expects results from asset management and investment strategies to underpin steady performance.
A-Reit’s units closed trading yesterday at $2.10, down one cent.
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