Elite Commercial REIT’s distributable income drops 26.1% YoY to $7.5m in 1Q23

The REIT attributed the decline to increased borrowing costs amongst others.

SGX-listed Elite Commercial REIT posted a 26.1% YoY lower distributable income in the first quarter of 2023, its latest business update showed.

In a bourse filing, the REIT attributed the decline to increased borrowing costs, lower revenue from vacancies as well as an enlarged equity base year-on-year. 

Given the decline in distributable income, the REIT posted a 26.6% YoY lower available distribution per unit (DPU) of $0.016 (£0.0094).

On the flip side, the REIT’s portfolio remained healthy, with occupancy at 97.9% and weighted average lease expiry at 4.5 years as of 31 March. 

Meanwhile, the REIT also reported that it will conduct a rent escalation review for 136 of its 155 assets on 1 April. All of the 136 assets are occupied by the Department for Work and Pensions, except for one which is occupied by the Ministry of Defence.

Of the 136 assets, 134 will have their rent escalation pegged to the UK Consumer Price Index (CPI), whilst the remaining two have rents based on open market rent. 

“Out of the 134 assets, 11 of them have agreed to rent reductions in exchange for the removal of their break options. Based on the respective lease agreements, the rent escalations are 15.28% for 127 of the assets and 21.07% for the rest of the seven assets,” the REIT explained.

“The revised rent per annum for all 136 assets effective 1 April 2023 comes in at £36.0 million, representing a net annualised rent escalation of 13.1% compared to the rent per annum as of 31 March 2023 of £31.8m ($52.95m),” the REIT added.

$1 = £0.60