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These 3 REITs Have Delivered Mixed Results In Their Latest Quarterly Earnings

Photo credit: Rafael Matsunaga. Licence: http://creativecommons.org/licenses/by/2.0/

The earnings season has more or less ended. There were some real estate investment trusts that managed to show growth while there were some that did not. Then, there were also those that delivered a mixed bag of results.

Let’s look at three such REITs (they are presented in no particular order):

1. Ascendas Real Estate Investment Trust (SGX: A17U) is one of the REITs that reported mixed results lately.

As a quick introduction, the trust owns properties that are used for commercial and/or industrial purposes. The REIT’s portfolio currently contains 102 properties in Singapore, 28 properties in Australia, and one business park property in China.

During the quarter ended 30 September 2016, Ascendas REIT’s gross revenue grew 12.5% year-on-year while its net property income increased by 23.1%. But, its distribution per unit (DPU) came in at only 4.03 cents, a 3.1% decline.

The REIT also ended the reporting quarter with an overall portfolio occupancy of 89.1% and a weighted average lease to expiry of 3.7 years. A year ago, these numbers were at 89.0% and 3.6 years, respectively.

Ascendas REIT did mention in its earnings that the industrial property market “has remained challenging, weighed down by the slowing economy.”

2. The next REIT on the list is Cache Logistics Trust (SGX: K2LU), which focuses on logistics properties, as its name suggests.

Its portfolio currently comprises 19 logistics warehouse properties which are located in established logistics clusters in Singapore, Australia, and China.

In the third quarter of 2016, the REIT posted year-on-year growth of 21.2% and 17.5% for its gross revenue and net property income respectively. Yet, its distribution per unit came in lower by 13.7%, due to the presence of a one-time capital distribution from the sale of the Kim Heng Warehouse in the third-quarter of 2015.

Cache Logistics Trust ended the reporting quarter with an occupancy level of 96.5%, a slight increase from the 95.2% achieved a year ago. This resulted in the REIT’s higher revenue and net property income.

The REIT holds similar sentiments as Ascendas REIT when it comes to Singapore’s industrial property market. In its earnings release, Cache Logistics Trust said that “industrial rents [in Singapore] are expected to fall further” given lower demand and higher supply.

3. Lastly, we have Mapletree Logistics Trust (SGX: M44U). As of 30 September 2016, the REIT owns 124 logistics properties that are located in Asia (Singapore, Hong Kong, Japan, China, Malaysia, South Korea, Vietnam) and Australia.

Mapletree Logistics Trust reported a 4.7% increase in its gross revenue for the third quarter of 2016. There was similar growth of 5.3% for the REIT’s net property income. But, the distribution per unit was unchanged. Moreover, the overall portfolio occupancy rate of 96.4% is down slightly from the 96.9% seen a year ago.

In the earnings release, Mapletree Logistics Trust commented that the “leasing environment for [its] portfolio is challenging especially for several single user assets.” The REIT thinks that consumer and business sentiment have been negatively affected by subdued global economic conditions.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.