Ascendas REIT's topline grew despite operational headwinds

Gross revenues up 12.5% in 2Q on recent acquisitions.

Ascendas REIT's gross revenues and net property income grew by 12.5% and 23.1% y-o-y to $205m and $152m respectively, driven mainly by acquisitions of properties from Australia and ONE@Changi in Singapore.

The acquisitions more than offset income loss from divestments of Ascendas Z-Link in China and Unilever Four Acres in Singapore, notes DBS Vickers Securities.

Operational expenses was lower by 9.9% mainly due to lower property taxes from a retrospective reduction in annual values for selected properties coupled with utility savings from selected properties.

Finance costs were 46% higher y-o-y to S$29.9m on the back of higher debt taken to fund its acquisitions. As a result, distributable income came in at S$106.5m, which is 12.3% higher y-o-y. 

However, DPU came in 3.1% lower y-o-y to 4.03 Scts due to enlarged share base and a one-off distribution of S$6.5m last year.

Stripping the one-offs, DBS Vickers Securities estimates that A-REIT would have reported 3.6% higher DPU compared to a year ago.