ESR-REIT's NPI slipped 16.8% to $80.2m in H1

The company saw lease conversions from single- to multi-tenancy for seven properties.

ESR-REIT's net property income (NPI) fell 16.8% to $80.2m in H1 2020, the company revealed in a press release. Gross revenue dropped 7.9% to $118.4m.

The lower revenue and NPI was partly attributed to lease conversions from single- to multi-tenancy for seven properties, where ESR-REIT took the costs of land rent, property tax and maintenance fees that tenants used to bear under a master lease arrangement.

The company also saw non-renewals and downsizing of certain tenants, and rental rebates were set aside for and/or given to tenants as part of the company’s measures to support tenants adversely affected by the pandemic.

Total distributable income for the period was $47.8m, with the total distribution per unit (DPU) for the period at $1.162 cents. The lower DPU was blamed on the impact of the pandemic, as well as the retention of about $7m of distributable income for prudent cash flow management.

Over half of ESR-REIT’s tenants were essential service providers and were operational during the circuit breaker. Amidst the uncertainty of the duration of the outbreak, the company cannot yet ascertain the full extent of impact on its financial performance.

“Whilst challenges remain in the operating environment, our cash position remains stable with no refinancing needs until June 2021,” the manager’s CEO and executive director Adrian Chui said.