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Ascott Residence Trust's 1Q DPU rises 7% to 1.45 cents on improved operating performance

Michelle Zhu
Michelle Zhu • 2 min read
Ascott Residence Trust's 1Q DPU rises 7% to 1.45 cents on improved operating performance
SINGAPORE (April 30): The manager of Ascott Residence Trust (ART) has declared a 1Q19 distribution per unit (DPU) of 1.45 cents, rising 7% on-year from the 1.35 cents it posted a year ago due to better operating performance, lower financing costs and a on
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SINGAPORE (April 30): The manager of Ascott Residence Trust (ART) has declared a 1Q19 distribution per unit (DPU) of 1.45 cents, rising 7% on-year from the 1.35 cents it posted a year ago due to better operating performance, lower financing costs and a one-off realised exchange gain.

Revenue for 1Q grew 3% y-o-y to $115.9 million from $112.8 million previously on improved performance from properties across Singapore, Philippines and the UK.

Singapore and the UK remain the top contributing markets with gross profit rising 35% and 20% on-year, respectively, due to higher market demand. There was also stronger leisure demand for ART’s serviced residences in Tokyo and Melbourne, says the manager.

Total revenue contributions came mainly from properties on management contracts (68%), followed by those on master leases (17%) and properties on management contracts with minimum guaranteed income (15%).

Revenue per available unit (RevPAU) for the quarter was $133, an increase of 3% from $129 a year ago.

In all, gross profit grew 12% or by $5.9 million to $54.6 million from $48.7 million previously due to the higher revenue as well as upon the adoption of FRS 116 Leases with effect from 1 January 2019. Excluding the FRS 116 adjustments, gross profit would have increased by $0.8 million, or 2%.

ART also booked a realised exchange gain of $2.6 million over the quarter, which mainly arose from the repayment of foreign currency bank loans with the 15% deposit received for the divestment of Ascott Raffles Place Singapore.

The divestment, which was announced in Jan this year, is expected to be completed in May 2019.

Going forward, ART says it has a debt headroom of close to $900 million, which will give it the financial flexibility to pursue accretive acquisitions from its sponsor, The Ascott Limited, and third parties.

“We will continue to proactively reconstitute our portfolio to strengthen ART’s position as the largest and most geographically diversified hospitality REIT in Singapore,” says Bob Tan, the manager’s chairman.

“With the higher occupancy at Ascott Makati and higher rates from its renovated apartments, revenue for our Philippines market increased 24%. We expect higher average daily rates for Somerset Grand Citra Jakarta and Element New York Times Square West when their refurbishments are completed in mid-2019,” adds Beh Siew Kim, CEO of the manager.

Units in ART closed 2 cents higher at $1.21 on Monday.

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