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ESR-REIT posts 1.7% growth in 3QFY21 DPU of 0.712 cents

Felicia Tan
Felicia Tan10/27/2021 07:27 AM GMT+08  • 3 min read
ESR-REIT posts 1.7% growth in 3QFY21 DPU of 0.712 cents
As at end-September, ESR-REIT reported aggregate leverage of 41.3% with a weighted average debt expiry of 2.6 years.
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ESR-REIT has reported distribution per unit (DPU) of 0.712 cents for the 3QFY2021 ended September, 1.7% higher than DPU of 0.700 cents in the corresponding period the year before.

Gross revenue for the period grew 7.2% y-o-y to $61.1 million, while net property income (NPI) increased by 8.6% y-o-y to $43.9 million. The higher figures were due to the absence of Covid-19 rental rebates to tenants during this quarter, as well as contributions from 46A Tanjong Penjuru.

Accordingly, 3QFY2021 distributable income grew 15.1% y-o-y to $28.6 million, mainly due to the higher NPI. The higher distributable income was also attributable to contribution from ESR-REIT’s investment in 10% interest in ESR Australia Logistics Partnership.

See: Analysts recommend unit holders of ESR-REIT and ARA LOGOS Logistics Trust to vote in favour of proposed merger

Despite the higher distributable income, 3QFY2021 DPU saw a marginal increase on the back of an enlarged unit base as the REIT had proposed to place 268.8 million new units with a preferential offering of 124.1 million new units, which were completed on May 18 and Aug 26 respectively.

Rental collection during the quarter was close to 98% of total receivables, which was better than pre-Covid-19 levels.

The REIT’s portfolio occupancy rate in the 3QFY2021 stood at 91.2%, above JTC’s industrial average of 90.1%.

As at end-September, ESR-REIT reported aggregate leverage of 41.3% with a weighted average debt expiry of 2.6 years.

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In its outlook statement, the REIT manager expects the industrial leasing market to continue its recovery. Logistics rents are also expected to grow on sustained demand driven by e-commerce growth.

“ESR-REIT delivered a good operating performance during the third quarter, driven by continued acceleration in digital adoption and paradigm shifts in the global manufacturing supply chain. Despite the impact of Phase 2 (Heightened Alert), our leasing activities increased with approximately 702,500 sq ft of space leased and renewed, underpinned by strong leasing interest received from technology, e-commerce and logistics sectors,” says Adrian Chui, CEO and executive director of the manager.

“Although leasing challenges in the business park segment remain due to the prolonged work-from-home measures while operating expenses may also be affected by the increasing fuel prices and overall general inflation attributed to labour shortages from continued border closures, this quarter has highlighted the fundamental strength of our business and the resilience of our diversified portfolio when the Phase 2 (Heightened Alert) restrictions eased,” he continues.

“With the continued support of our unitholders and our sponsor, ESR Cayman, we are well-positioned to enhance our performance by adding high-quality properties with stable cash flows in strong rental growth markets to our portfolio, undertaking asset enhancements and/or redevelopments while divesting non-core assets to deliver sustainable growth with lower risks for all unitholders,” adds Chui.

Units in ESR-REIT closed 0.5 cent lower or 1.04% down at 47.5 cents on Oct 26.


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