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Ascendas REIT reports 2.8% higher 1HFY2022 DPU of 7.873 cents

Felicia Tan
Felicia Tan8/2/2022 05:48 PM GMT+08  • 3 min read
Ascendas REIT reports 2.8% higher 1HFY2022 DPU of 7.873 cents
An aerial view of 1 Science Park Drive. Photo: Ascendas REIT
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The manager of Ascendas REIT has reported a distribution per unit (DPU) of 7.873 cents for the 1HFY2022 ended June, 2.8% higher than the DPU of 7.660 cents in the same period the year before.

During the half-year period, the REIT’s distributable income increased by 6.3% y-o-y to $330.7 million. The amount was split among a higher base of 4.20 billion applicable units in the REIT, 3.5% higher y-o-y.

Gross revenue for the 1HFY2022 increased by 13.7% y-o-y to $666.5 million. This was mainly due to the contributions from the REIT’s newly-acquired properties in Singapore, the UK, Europe, the US and Australia, as well as a built-to-suit development in Singapore. The acquisitions were made during the FY2021 and 1HFY2022.

Property operating expenses for the period increased by 35.0% y-o-y to $189.6 million, in line with the acquisitions completed in the FY2021 and 1HFY2022, as well as the higher utility expenses relating to Singapore properties.

As a result, net property income (NPI) increased by 7.0% y-o-y to $476.9 million.

See also: Chip Eng Seng reports improved earnings of $38.5 million for 1HFY2022

In the 1HFY2022, the REIT recorded a foreign exchange loss of $31.4 million, compared to the gain of $12.8 million in the 1HFY2021. The loss this year was mainly due to the weakening of SGD against HKD in relation to the HKD-denominated medium term notes (MTN), as well as USD-denominated borrowings.

As at June 30, the REIT’s portfolio occupancy rate rose 2.7 percentage points y-o-y and 1.4 percentage points q-o-q to 94.0%.

Its portfolio weighted average lease expiry (WALE) stood at 3.7 years.

As at June 30, the REIT’s aggregate leverage stood at 36.7%, 0.8 percentage points higher q-o-q.

See also: Singapore Land 1HFY2022 earnings up 290% y-o-y on revaluation gains

Cash and cash equivalents for the period stood at $285.9 million.

“In the first half, we achieved strong results across our markets. Ascendas Reit’s total investments increased to $16.6 billion (vs $15.9 billion in 1HFY2021), and revenue increased by 13.7% to $666.5 million. At the operating level, Ascendas Reit’s portfolio occupancy rate rose to 94.0% (vs 91.3% in 1HFY2021) and the average portfolio rental reversion was 9.4% for leases renewed in the first half of 2022,” says William Tay, CEO and executive director of the manager.

Noting the REIT’s y-o-y DPU growth, Tay adds: “While we have delivered DPU growth consecutively for the past three periods since 1HFY2021 and prospects for our business remain healthy, we are closely monitoring the ongoing uncertainty in the global economy.”

In its statement dated Aug 2, the REIT manager says that there are “deep structural trends” that continue to present tailwinds for the REIT, despite the uncertainty in the global economy at present.

“For example, companies expanding logistics capacities to build resilience in their supply chains and the digitalisation of the economy are expected to drive demand for Ascendas Reit’s logistics properties, as well as business space and data centres respectively,” reads the statement.

“Overall, Ascendas Reit’s diversified portfolio in developed markets, A3 Moody’s credit rating and experienced team will help it to stay ahead of the curve, weather the economic uncertainties and continue to grow in a healthy manner,” it adds.

The DPU will be paid on Sept 5 with its record date being Aug 11.

Units in Ascendas REIT closed 1 cent lower or 0.34% down at $2.96 on Aug 2.

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