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ESR-REIT focuses on AEIs and leases as sponsor creates pipeline with Sabana REIT transaction

Goola Warden
Goola Warden 7/26/2019 07:30 AM GMT+08  • 8 min read
ESR-REIT focuses on AEIs and leases as sponsor creates pipeline with Sabana REIT transaction
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(July 29): Adrian Chui, CEO of ESR-REIT’s manager, was frank and transparent when asked about the outlook for industrial property, rental reversions, tenants, sponsors and mergers and acquisitions. ESR-REIT owns a portfolio of 56 assets valued at around $3.02 billion, excluding the acquisition of PTC Logistics Hub, which will be completed in 3Q2019.

The real estate investment trust announced its 2QFY2019 and 1HFY2019 results on July 23. Operationally, distribution per unit (DPU) stabilised at 1.004 cents, up marginally y-o-y, which translates into an annualised yield of 7.4%. -ESR-REIT trades at a premium to its net asset value (NAV) of 45.7 cents a unit.

Chui acknowledges that dark clouds are forming in 2H. For one thing, the trade war rhetoric is no longer just rhetoric but a -reality. Secondly, the International Monetary Fund (IMF) has just cut its growth forecasts for the global economy. It predicts growth of 3.2% for 2019 and 3.5% for 2020 (0.1 percentage point lower than in the April world economic outlook projections for both years). Singapore recorded a 3.4% q-o-q contraction in 2QCY2019, and non-oil domestic exports plunged 17.3% y-o-y in June.

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