CapitaLand Ascendas REIT (CLAR) has reported a distribution per unit (DPU) of 7.524 cents for the 1HFY2024 ended June 30, 2.5% lower y-o-y.
The lower DPU is due to higher property operating expenses and an enlarged base. For the six-month period, CLAR had 4.4 billion units in issue, 3.7% higher than the 4.24 billion units in issue in the 1HFY2023.
Gross revenue rose by 7.2% y-o-y to $770.1 million mainly due to full contributions from the REIT’s acquisitions in Singapore that were completed in 1HFY2023. The full contribution from the acquisition of a data centre in the UK and the completion of the development of a suburban office building in Sydney, as well as a convert-to-suit project of 6055 Lusk Boulevard in the US also led to the higher revenue. The UK data centre was acquired in August 2023 while the Sydney office development was completed in October 2023. The convert-to-suit project in the US was completed in December 2023. The growth was partly offset by the divestments of CLAR’s Australian properties as well as one Singapore industrial property. The Australian properties were divested in February this year while the Singapore logistics property was divested in May 2023. Revenue growth was also offset by the decommissioning of 5 Toh Guan Road East in Singapore Welwyn Garden City, UK. Both properties were decommissioned in November 2023 and June this year, respectively.
Net property income (NPI) rose by 3.9% y-o-y to $528.4 million as property operating expenses increased. Net finance costs also rose on a y-o-y basis.
In the 1HFY2024, CLAR recorded a foreign exchange (forex) loss of $44.9 million, compared to the forex gain of $48.0 million in the corresponding period the year before. The loss this year is mainly due to the settlement of a Japanese yen (JPY)-denominated medium-term note (MTN).
Distributable income inched up by 1.0% y-o-y to $330.8 million.
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As at June 30, portfolio occupancy stood at 93.1%, 1.1 percentage points lower h-o-h, although the portfolio registered a positive rental reversion of 13.4%.
Portfolio weighted average lease expiry (WALE) remained stable at 3.8 years as at June 30.
As at June 30, CLAR has a total of 229 properties spread across Singapore, Australia, the US, the UK and Europe. Its investment properties are valued at $16.87 billion, 0.3% lower h-o-h. They span across three key segments, business space & life sciences; industrial & data centres; and logistics.
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As at the same period, CLAR’s net asset value (NAV) per unit stood at 227 cents.
“Our well-diversified portfolio and diverse tenant mix continue to deliver a solid financial and operational performance in 1HFY2024,” says William Tay, CEO and executive director of the manager.
He adds: “Besides driving organic growth, we are committed to growing our portfolio prudently through acquisitions and developments that are DPU-accretive. With our robust balance sheet and investment grade credit rating, we are in a strong position to seize growth opportunities to strengthen our portfolio.”
In its outlook statement, CLAR says the uncertainties surrounding inflationary trends, the pace and timing of the monetary policy easing as well as the intensity of the ongoing geopolitical conflicts will continue to weigh on CLAR’s tenants’ businesses and its operating costs.
However, it says it remains “well-positioned” to seize opportunities thanks to its resilient and diversified portfolio, strong balance sheet and investment grade credit rating.
Unitholders will receive their DPUs on Sept 2.
Units in CLAR closed 1 cent higher or 0.38% up at $2.68 on July 30.
