Ascendas REIT NPI up 3.8% to $159.2m in Q1

Property acquisitions and redevelopment sealed its NPI's growth.

Ascendas Real Estate Investment Trust’s (REIT) net property income (NPI) grew 3.8% YoY to $159.2m in Q1 2018 backed by the contributions of their newly acquired Australia properties and a Singapore redeveloped property, an announcement revealed.

In addition, lower property operating expenses also contributed to the higher NPI as property tax expense was reduced due to retrospective downward revisions in the annual value of certain properties.

The firm’s gross revenue rose 1.55% YoY to 216.6m in Q1 2018 whilst total amount available for distribution dipped 1% to $117.3m. Distribution per unit (DPU) declined 1.2% YoY to 4.002 from 4.049 on the back of an absence of a one-off distribution.

During the quarter, Ascendas REIT strengthened its presence in Australia through the acquisition of two freehold logistics properties in Melbourne, Australia for A$50.2 m ($50.9m).

Meanwhile, its overall portfolio rate declined to 90.5% from 91.5% whilst occupancy rate for Singapore slipped to 88.1% due to the newly completed redevelopment in 20 Tuas Avenue 1 which has an occupancy rate of 51.15 by late June. On the other hand, the firm’s Australian portfolio soars high at 98.6%.

Also read: Ascendas REIT eyes 12 properties in UK

The firm added that they achieved a rental reversion of about +10.5% for renewed leases in multi-tenant buildings in Singapore during Q1. The largest proportion of demands came from tenants from the transport and storage sector that accounted for 46.7% of new demand by gross revenue.

Ascendas REIT thinks that the escalating US-China trade tensions could be a risk to the global outlook despite strengthened global trade and industrial production.

For their Singapore portfolio, the firm believes that the industrial property market will go through a gradual recovery amidst healthy macroeconomic data and the tapering off of new property supply.

“Although leasing enquiries have improved in recent months, businesses are still cautious and some are still consolidating and right-sizing,” the firm commented.