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MARKETS & INVESTING, RESIDENTIAL PROPERTY | Staff Reporter, Singapore
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Ascendas REIT NPI up 11.5% in Q1

The adoption of FRS 116 boosted income.

Ascendas REIT saw its net property income rise 11.5% YoY from $159.2m to $177.5m in Q1, an announcement revealed. Revenue also rose 6.1% YoY to $229.7m from $216.6m.

Also read: Ascendas REIT's NPI up 3.2% to $649.58m in FY2018/2019

The increase in NPI was attributed to the adoption of the Singapore Financial Reporting Standard 116 Leases (FRS 116). Excluding the adoption of FRS 116, NPI would have risen by 6.3% YoY. Meanwhile, revenue growth was driven by the contributions from the company’s new acquisitions in Australia and the UK during the last fiscal year.

Also read: Ascendas REIT and ESR-REIT could suffer short-term pains from Hyflux troubles

Distribution per unit (DPU) inched up 0.1% YoY $4.005 from $4.002 on the back of an enlarged number of units in issue, whilst the total amount available for distribution moved up 6.3% to $124.7m from $117m over the same period last year.

As of June 30, the firm’s customer base stood at 1,350 tenants across 98 properties in Singapore, 35 properties in Australia, and 38 properties in the UK. Its overall occupancy rate declined 91.1% from 91.9% in the previous quarter mainly because of the lower portfolio occupancy rate in Australia, which plummeted to 92.3% from 98% in March. However, their Singapore portfolio occupancy rate improved to 88.9% from 88.3% due to new take-ups at 37A Tampines Street 92, 20 Tuas Avenue 1 and 10 Toh Guan Road.

Based on new leases signed, tenants from the transport and storage sector accounted for the largest proportion of new demand by gross rental income in Q1 at 28.9%, the firm noted.

In the release, Ascendas REIT also announced that it has entered into a sale and purchase agreement with Seow Kim Polythelene for No.8 Loyang Way 1 for $27m, which is 8% higher than the original price and 14.4% higher than the market valuation of $23.6m. The firm stated that the proposed divestment’s proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs.

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