ESR-Logos Reit reports 6% fall in H1 DPU

Higher utility expenses drag down DPU for the first half of the year.

ESR-Logos Reit posted a distribution per unit (DPU) of 1.460 cents for the first half of the year, a drop of 6% compared to the same period last year.

The firm attributed the drop to the higher utility expenses, as well as the full impact of an enlarged Unit base resulting from the equity fundraising completed in May and August 2021 where a portion of the funds raised was deployed towards asset enhancement initiatives that are still ongoing.

Net property income (NPI) increased, albeit at a slower pace, 18.2% YoY to $102.8m whilst gross revenue grew 23.3% to $147.7m, mainly attributed to contributions from ALOG Trust following the completion of the merger. Meanwhile, NPI’s slow growth rate was due to higher utility expenses arising from a surge in global energy prices and increased electricity demand as the economy recovers post-COVID-19, thereby resulting in higher property expenses in H1 2022.

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Adrian Chui, CEO and Executive Director of the Manager of ESR-Logos Reit said that the taming of inflationary pressures will have an impact on growth, especially business sentiments and consumer confidence, and moderate the robust demand for space needs. However, they still expect an expansionary demand for the logistics and general industrial sectors to continue into the short to medium term.

“Going forward, we will focus on total return upside by propelling E-LOG towards an enhanced growth trajectory through accelerating its exposure to in-demand New Economy and longer land tenure assets to provide rental and NAV upside to our Unitholders,” Chui said.