SINGAPORE (Apr 28): The manager of Ascendas REIT (A-REIT) has reported a “healthy operational performance” for 1QFY2020 ended March.
In its quarterly business update released on Tuesday, the REIT cited a “challenging leasing environment”, as well as expected delays in completion of Grab Holding’s headquarters in 1Q2021 from 4Q2020 due to the circuit breaker measures implemented by the government.
That said, that did not impact the REIT’s portfolio occupancy for 1QFY2020, which was reported at a healthy 91.7%. Its overseas portfolios in Australia, the US, and the UK, reported occupancies of 97.3%, 92.9%, and 97.5% respectively.
Overall, the REIT reported a positive portfolio rental reversion of 8.0% for renewed leases in multi-tenant buildings for this quarter.
A-REIT also maintained a robust balance sheet to help tide it through the Covid-19 pandemic. As of March 31, its aggregate leverage came in at 36.2%, and its debt maturity profile remains healthy with a weighted average tenure of debt outstanding at 3.8 years.
The REIT says that its operating cashflow remains stable too, mainly attributable to $490 million reserve that includes $290 million cash, and $200 million in committed facilities to tide it through a prolonged period caused by Covid-19. During 1Q FY2020, three of its properties, namely Wisma Gulab, 202 Kallang Bahru and 25 Changi South Street 1, were divested for total sales proceeds of $125.3 million.
In addition, the REIT's porfolio is worth $12.8 billion, comprising a mix of 197 properties located in Singapore, Australia, the US, and the UK. These properties include business parks and suburban offices, industrial properties, and logistics properties at 45%, 30%, and 25% respectively.
So far, none of the REIT’s properties had to close down due to the circuit breaker measures, due to some 85% of its tenants operating in essential industries.
In its outlook statement, the manager of A-REIT says the trust is supported by a “strong balance sheet, good liquidity position, well-diversified portfolio and strong tenant base”.
“Due to the on-going COVID-19 impact on the various world economies, we expect more challenges ahead. We have sufficient cash and committed undrawn credit facilities to meet current financial and operational obligations,” says William Tay, CEO and executive director of the manager.
“In line with its support for tenants, Ascendas Reit will be fully passing the benefit of any reduction in property tax granted by the government by way of a property tax rebate to its qualifying tenants… As the COVID-19 situation remains uncertain, Ascendas Reit will continue to engage its tenants and is prepared to render additional support should the situation worsen,” he adds.
Units in Ascendas REIT closed 4 cents higher, or 1.4% up, at $2.86 on Tuesday.