Ascendas REIT’s net property income expands by 8% to $123.8m

Its recent acquisitions made the difference.

Refusing to fold in the middle of a challenging operating environment, the property conglomerate shielded itself with the strong showing of its new acquisitions, completed asset enhancement initiatives, and higher rental reversion and occupancy.

A diversified portfolio proved to be resilient for Ascendas, as occupancy rates for the overall portfolio and multi-tenant buildings improved to 89% and 84.9%, respectively, according to a statement from the property firm.

“This was mainly attributable to higher occupancies at 40 Penjuru Lane (75.5% from 70.9% in 1Q FY15/16), Aperia (90.4% from 83.9% in 1Q FY15/16) and A-REIT City @Jinqiao (60.7% from 58.1% in 1Q FY15/16),” Ascendas said.

A rare showing in the gloomy property sector, the REIT achieved positive positive rental reversion across all segments of its portfolio.

“A weighted average rental reversion of 9.1% was achieved for leases renewed in 2Q FY15/16. Weighted average lease term of new leases signed in 2Q FY15/16 was 3.0 years. The top 10 tenants accounted for not more than 19.0% of A-REIT’s total portfolio income,” Ascendas REIT said.

“With around 1,430 tenants in a portfolio of 102 properties in Singapore and two in China, A-REIT is well-diversified in terms of rental income where no single property accounts for more than 6.0% of A-REIT’s monthly gross revenue,” they added.

Despite the strong showing, Ascendas believes it could reach even greater heights, as the 11% vacant space in its portfolio exhibits great potential once leased.

“However, the industrial property market conditions in Singapore are expected to remain challenging. With significant new supply and tepid economic growth both in Singapore and globally, there may be pressure on occupancy growth,” Ascendas REIT said.