Ascendas REIT posts 0.7% higher 3Q DPU of 3.998 cents; secures $181.2 mil BTS project from Grab

Ascendas REIT posts 0.7% higher 3Q DPU of 3.998 cents; secures $181.2 mil BTS project from Grab

Michelle Zhu
30/01/19, 10:20 pm

SINGAPORE (Jan 30): The manager of Ascendas REIT (A-REIT) reported a 3Q19 distribution per unit (DPU) of 3.998 cents, growing 0.7% from 3.97 cents a year ago after taking into account an enlarged number of units in issue.

The growth in DPU was mainly attributed to contributions from both newly-acquired and redeveloped properties.

Gross revenue for the quarter grew 4.2% to $226.4 million from $217.3 million previously, due to contributions from new UK logistics properties acquired in late 2018, recently acquired properties in Australia over Dec 2017-Aug 2018, as well as a redeveloped property at Tuas Avenue 1 in Singapore.

These key contributions were however partially offset by non-renewals in certain properties in Singapore.

In all, net property income (NPI) grew 6.6% on-year to $168 million from $157.6 million in 3Q18 as a result of lower property tax expenses compared to a year ago.

As at end-3Q19, A-REIT had 171 properties in its portfolio compared to 132 properties in the same quarter a year ago, the bulk of which are in Singapore.

26 of 38 logistics properties in the UK were recently acquired, and are worth $459.2 million.

See: Ascendas REIT enlarges UK portfolio with $459 mil acquisition of logistics properties

Citing US-China trade uncertainties and the resultant lowered interest rate hike expectations among economists, the REIT manager says businesses in Singapore remain cautious and continue to review their space requirements, amid the uncertain global economic outlook, despite tapering industrial supply.

With regards to its Australian properties, which are well-located and enjoying stable portfolio performance, the manager says it will continue to be prudent and continue to look for accretive opportunities to further grow AUM.

In the UK, the manager highlights that logistics has outperformed the wider UK market due to tight supply in support of rental growth. While it expects the REIT to be “in good stead” to overcome any potential impact arising from Brexit, the manager intends to continue looking for acquisition opportunities to scale up its presence in the UK.

In a separate filing on Wednesday, the manager of A-REIT says it has secured a $181.2 million build-to-suit (BTS) development project which will serve as ride-hailing firm Grab’s headquarters in Singapore upon its completion in 4Q20.

According to the manager, Grab has committed to lease 100% of the 42,310 sq m development at one-north for 11 years.

William Tay, CEO and executive director of the manager, says the BTS development takes A-REIT’s business and science park investments to a total of $3.8 billion and accounts for 34% of total portfolio value at $11.3 billion.

“The long lease commitment of 11 years by Grab will provide Ascendas REIT with a stable income stream,” says Tay.

“The increased capacity of our headquarters will also enable us to achieve our ambitions of becoming the leading super-app in Southeast Asia. To this end, we have plans to create and hire for a thousand more exciting roles globally over the next 12 months,” adds Ong Chin Yin, Head of People, Grab.

Units in A-REIT closed 4 cents lower at $2.72 on Wednesday. 

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