A-REIT reveals outlook for the rest of financial year

Positive on earnings but unsure on occupancy.

Along with its release of its second quarter results, Ascendas REIT (A-REIT) shared its outlook for the financial year ending 31 March 2014, which showed a fairly optimistic forecast on income stability and rental reversion but with slight uncertainty in occupancy rates of several properties.

"A-REIT had 21.4% of its revenue due for renewal at the beginning of FY13/14. As a result of its proactive portfolio management, this has been reduced to 10.5% at the end of 2Q FY13/14, thereby increasing the income stability of A-REIT. Furthermore, A-REIT’s portfolio weighted average lease to expiry of about 3.9 years will provide sustainable and predictable earnings," it said.

"For the balance of the financial year, the passing rent of leases due for renewal is still below market spot rent and hence, positive rental reversion can be expected when these leases are renewed. Occupancy in certain properties may soften in the coming quarters; however, there could also be potential upside as the current portfolio vacancy of 9.9% is being leased out," it added.

"Barring any unforeseen event and any weakening of the economic environment, the Manager expects A-REIT to deliver a comparable performance with the previous financial year," it said further.