Ascendas REIT's net property income up 7.4% to $154.1m

Thanks to cheaper spend on utilities.

Ascendas REIT reported strong numbers for the past quarter which ended in March, with revenues up by 2.4% to $298m whilst net property income jumps 7.4% to $154.1m.

According to OCBC Investment Research, this was largely driven by inorganic growth, as well as the less utilities expenses recorded due to lower rates contracted for certain properties and lower property tax expenses arising from retrospective downward revisions in the annual value of some properties.

This led to the 13.5% growth in its DPU at 3.85 S cents.

Here's more from OCBC Investment Research:

Operationally, A-REIT achieved positive rental reversions of 3.2% and 3.1% in 4QFY17 and FY17, respectively. However, its Logistics & Distribution Centres segment in Singapore experienced negative rental reversions of 18.8% in 4QFY17, which management attributed to competitive pressures in the market due to an oversupply situation.

Looking ahead, A-REIT expects rental reversion to be subdued or flat in light of global macroeconomic uncertainties. Approximately 16.6% of its gross revenue is due for renewal in FY18. Portfolio occupancy was unchanged QoQ at 90.2%, as improved occupancy at Singapore was offset by a higher vacancy rate in Australia. The latter was due to the termination of a lease in Sydney, but management is close to signing a replacement tenant for eight years.