3 Things Ascendas Real Estate Investment Trust’s Management Wants Investors To Know About The REIT’s Latest Performance

Ascendas Real Estate Investment Trust (SGX: A17U), or Ascendas REIT, owns properties that are used for either commercial or industrial purposes, or both. It has 99 properties in Singapore and 33 properties in Australia.

The REIT has recently presented its 2018/19 first quarter (1Q FY18/19) earnings update. In this article, I will share with investors three things from the latest presentation.

Summary of performance

Source: Ascendas REIT’s Results Presentation

The above is a slide from Ascendas REIT’s latest results presentation.

The growth in revenue and net property income was mainly driven by contributions from newly acquired properties in Australia and a redeveloped property in Singapore. Despite higher net property income, distribution per unit (DPU) came in lower due to absence of one-off distribution. Excluding one-off distribution, DPU would have improved 4.0% year-on-year.

Portfolio occupancy rates

Source: Ascendas REIT’s Results Presentation

The above slide breaks down Ascendas REIT’s occupancy rates by region and quarter.

Overall, we can see that total occupancy rates has declined on a year-on-year and quarter-on-quarter basis. This was mainly driven by weaker occupany rates in both regions. One point worth mentioning here is that Ascendas REIT Singapore portfolio outperformed the industry average of 84.3% in the quarter.

Lease expiry profile

Source: Ascendas REIT’s Results Presentation

The above is a slide showing the lease expiry profile as at 30 June 2018.

Overall, Ascendas REIT’s portfolio weighted average lease to expiry was 4.1 years. Within the portfolio, 9.3% of the leases will expire by FY18/19, 41.8% of the leases will expire in the next two years and the remaining 49.8% will expire from FY21/22.

One positive aspect of Ascendas REIT’s lease expiry profile is the staggered nature, avoiding the concentration of lease renewals in any particular year. Moreover, such a profile also provides good earnings visibility for the REIT in the next few years.

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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.