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

The dip was caused by a one-off reversal of accrued operating expense last year.

Ascendas Real Estate Investment Trust (Ascendas REIT) saw its net profit income (NPI) slip 1% to $158.9m YoY from $160.5m in Q2, whilst its distribution per unit (DPU) fell 4.2% YoY to $3.89 cents, an announcement revealed.

According to its financial report, NPI declined thanks to a one-off reversal of accrued operating expense in Q2 last year. Its total amount available for distribution also fell 3.1% to $115m from $118.8m YoY due to additional interest expenses.

Also read: Ascendas REIT NPI up3.8% to $159.2m in Q1

Meanwhile, it blamed its DPU decline to lower contribution from Singapore, higher interest expense and the $450m equity raised in anticipation of its second UK portfolio acquisition and ‘Built-to-Suit’ development in Singapore.

“We had a very active quarter and made significant progress in expanding into the UK,” William Tay, chief executive officer and executive director of Ascendas Funds Management’s board of directors, said. “We also raised equity in anticipation of the second UK portfolio acquisition which was completed in October 2018.”

Gross revenue however climbed 1.1% to $218.1m YoY from $215.8m thanks to contributions from newly acquired properties in Australia and the UK. The increase was partially offset by lower occupancies in Singapore, the statement said.

The firm remains cautiously positive of its growth amidst trade tensions between US and China which Ascendas REIT noted could pose a threat to its global outlook for Singapore, Australia and the UK.

“Interest rates are widely expected to continue rising in the months ahead,” Ascendas REIT said. “With 84.6% borrowings on fixed rates and a health aggregate leverage level of 33.2%, Ascendas REIT is well positioned to mitigate the impact of interest rate increases and maintain an optimal financial position.”