Ascendas REIT's property in Changi Business Park, One@Changi City. (Photo: REITsWeek)

Ascendas REIT has reported a distribution per unit (DPU) of 3.978 Singapore cents for its 2Q 2019, an increase of 2.3% year-on-year.

The industrial REIT’s gross revenue rose by 5.3% year-on-year to SGD229.6 million, while net property income rose by 12.0% over the same period to SGD177.9 million.

Ascendas REIT has attributed these to full quarter contribution from the 38 logistics properties in the UK that were acquired between August and October 2018.

“We will continue to diversify our portfolio geographically to ensure resilience and future growth”, said William Tay, CEO of the REIT’s manager, in a statement on the results.

Ascendas REIT’s overall portfolio occupancy for the quarter was at 91%, with weighted average lease expiry (WALE) at 4.0 years.

Its Singapore portfolio occupancy fell to 88.1% from 88.9% in the previous quarter after non-renewals at Logis Hub@Clementi, 31 International Business Park and Plaza 8.

The Singapore Exchange (SGX)-listed REIT’s Australian portfolio occupancy rate improved to 95.4% from 92.3% after 94 Lenore Drive, Sydney achieved full occupancy during the quarter.

In the UK, its occupancy rate declined to 97.7% from 100% due to higher vacancies at Unit 5, Wellesbourne Distribution Park and Unit 13, Wellesbourne Distribution Park.

The REIT’s aggregate leverage has improved to 36.2% from 37.2% with cost of borrowings maintained at 3.0%.

“The global growth outlook remains weak amid the protracted trade conflict between the United States and China, and other economic uncertainties”, the REIT warned in its results release.

“On top of the new supply of industrial property space that was built-up over the last 4-5 years, an additional 2.2 million square metres of new industrial space is expected to complete in the rest of 2019 and in 2020, representing 4.4% of the total stock of 49.6 million square metres as at 30 September 2019”, it added.

But given its well-diversified portfolio, and customer base geographically, Ascendas REIT expects its performance to remain stable in the quarters ahead.

Ascendas REIT has requested for a halt in the trading of units on the SGX pending an announcement.

Information from this financial results have been updated into the Singapore REITs fundamentals table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.