Ascott REIT's property in Singapore, Ascott Raffles Place. (Photo: REITsWeek)Ascott REIT's property in Singapore, Ascott Raffles Place. (Photo: REITsWeek)

Singapore-listed hospitality REIT, Ascott Residence Trust, announced on 15 April that it has achieved a distribution per unit (DPU) of 1.75 Singapore cents for its 1Q 2016, about 1% lower than the 1.76 cents delivered in 1Q 2015.

Distributable income for the period which spanned 1 January 2016 to 31 March 2016 was SGD27.3 million, a 1% increase over the SGD27.0 million achieved in the corresponding period of 2015.

The distribution numbers came on the back of a 17% and 13% increase in gross revenue and gross profit that came in at SGD105.5 million and SGD48.6 million respectively.

“Revenue for 1Q 2016 increased mainly due to the additional revenue of SGD16.4 million from Ascott REIT’s acquisitions in 2015”, said the REIT in its statement, adding that the increase was partially offset by decrease in revenue of SGD0.8 million from the divestment of six rental housing properties in Japan.

The REIT raised some SGD100 million in March 2016 through an equity placement by issuing 94.8 million new units to partly fund its second acquisition in New York. Excluding the effect of the equity placement, Ascott REIT’s 1Q 2016 DPU would have been 1.76 cents, unchanged from the corresponding period in 2015.

“We have once again achieved double-digit growth in revenue due to our SGD609 million acquisitions last year, with our first acquisition in New York making the greatest contribution”, said Lim Jit Poh, Chairman of the REIT’s manager, in a statement on the results.

“When our acquisition of Ascott Orchard Singapore is completed next year, Ascott REIT’s asset size will further expand to SGD5.4 billion, putting us well on course to achieve our target of SGD6.0 billion by 2017”, he said.

As at 31 March 2016, the REIT’s effective borrowing rate and aggregate leverage were 2.5% and 38.9% respectively. Portfolio weighted average lease expiry (WALE) was 4.0 years.

Units of Ascott REIT finished the trading day flat from its previous close on the Singapore Exchange at SGD1.12.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.