Ascendas REIT NPI edged up 6.6% to $168.03m in Q3

The growth was due to lower property tax expenses during the quarter.

Ascendas real estate investment trust (REIT) saw its net property income move up 6.6% YoY from $157.63m to $168.03m in Q3, an announcement revealed. Revenue also rose 4.2% YoY to $226.42m from $217.28m.

The increase in NPI was attributed to lower property tax expenses in Q3, whilst the growth in revenue was driven by contribution from the firm’s UK and Australia buys, as well as a redeveloped property along Tuas Avenue 1 in Singapore. On the other hand, these contributions were partially offset by non-renewals of SB Building and No. 31 International Business Park.

Also read: Ascendas REIT NPI slipped 1% to $158.9m in Q2

The firm’s distribution per unit (DPU) inched up 0.7% YoY $0.0399 from $0.0397 on the back of an enlarged number of units in issue.

“We have strengthened our portfolio with new acquisitions in the UK and in Australia, and these new investments have contributed significantly to the overall performance of the trust,” Ascendas Funds Management’s CEO and executive director William Tay said in a statement.

In Q3, Ascendas REIT completed the acquisition of 26 logistics properties in the UK worth $459.2m with a long weighted average lease to expiry of nine years and strong tenant occupancy. The acquisition brought the firm’s assets under management (AUM ) in the UK to $817.3m and accounting for 7% of Ascendas REIT’s total portfolio value of $11.1b.

As of December 2018, the firm’s customer base stood at about 1,350 tenants spread over 98 properties in Singapore, 35 properties in Australia and 38 properties in UK. Its overall portfolio occupancy rate in Q3 also rose to 91.3% from Q2’s 90.6%. Singapore’s portfolio occupancy rate improved from Q2’s 87.1% to 87.3% on the back of new take-ups at logistics properties, 20 Tuas Avenue 1 and 9 Changi South Street 3, as well as its light industrial property FoodAxis @ Senoko.

Also read: UK acquisitions could boost Ascendas REIT

Based on new leases signed, tenants from the precision engineering sector accounted for the largest proportion of new demand by gross rental income in Q3 at 31.3%, the firm added in its financial statement.

“About 1.6% of Ascendas REIT’s gross revenue will be due for renewal in the final quarter of FY18/19, and they are leases from multi-tenant buildings,” they noted. “Ascendas Funds Management has been proactively working on the renewal of the leases and marketing the vacant space to maximise returns from its portfolio.”