Ascendas REIT’s income jumps 15.3% to $533.7m in FY16

Thanks to new acquisitions’ increased contributions.

New acquisitions have served Ascendas REIT (AREIT) well, as net property income for FY16 jumped 15.3% YoY to $533.7m. The company enjoyed increased contributions from new properties, including the 27 logistics properties in Australia, as well as The Kendall, Hyflux Innovation Centre and ONE@Changi City in Singapore.

According to the company’s media release, estimated DPU saw 5.2% YoY climb to 15.357 S cents in FY16. Meanwhile, on a full-year basis, gross revenue for FY16 climbed 13% to $761m.

In Q4, AREIT posted positive rental reversion of 5.1% in Singapore, which led to 7% uplift in renewal rates for FY16.

Based on a report by OCBC, AREIT management guides that it anticipates rental reversion for FY17 to come flat to the low-single digit level, as the current market rental is marginally above the weighted average passing rental for most of its multi-tenant space due for renewal.

Meanwhile, overall portfolio occupancy stood at 87.6%, as at 31 March 2016. This reflects a dip of 1.6 percentage point QoQ. Lower occupancy was registered in China as a result of the completion of AREIT’s Jiashan Logistics Centre in March 2016. While the property is unoccupied, management is in talks with prospective tenants for around 34% of the space.

OCBC notes that AREIT suffered a net revaluation loss of $6.9m, with the main drag stemming from a write-down of $117m for its Australian assets. This was in turn caused by capitalised acquisition costs as well as a premium of 6.6% above the open market of the Australian portfolio when AREIT acquired it last year.

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