The managers of mainboard-listed Elite Commercial REIT has posted distribution per unit (DPU) of 1.95 British pence (3.43 Singapore cents) for the period from February 6 to June 30.
The DPU represents a 1.0% increase from its forecast of 1.93 pence.
Distributable income for the period registered at £6.3 million, outperforming its forecast by 1.3%.
This is the first reporting period incorporating the results of the REIT’s portfolio. The REIT officially listed on February 6 when its initial public offering (IPO) was completed.
Elite Commercial REIT reported revenue of £9.32 million, up 0.3% from its forecast of £9.28 million. The revenue comprised mainly from rental income from the leasing of office spaces of the REIT’s initial portfolio.
Over 99% of the rental income is derived from the current leases with the UK government. The balance rental income is from a small number of retail tenants in two of the 97 properties under its portfolio.
Finance costs were 7.3% lower at £1.04 million mainly due to the decline in the benchmark rate of the 3-month GBP Libor.
Property operating expenses increased 5.7% from its forecast to £261,000, which comprise lease management, property management fees, and property insurance expenses.
Net property income (NPI) stood at 0.2% higher than its forecast at £9.06 million.
The REIT also recorded £3.88 million in profit after tax, which is 7% greater than forecasted due to higher revenue, savings in operating expenses, finance costs, and lower than forecasted tax expenses.
Cash and cash equivalents as at June 30 stood at £20.35 million.
The REIT says its distribution policy is to distribute 100% of its annual distributable income for the period from the listing date to Dec 31, 2021.
Unitholders can expect to receive payment on September 11.
Despite the “challenging” macroeconomic backdrop due to Covid-19, Elite Commercial REIT says it continues to enjoy stable and recession-resistant cash flows underpinned by its counter-cyclical tenant – the Department for Work and Pensions (DWP), the UK government’s largest public service department.
“We are pleased with the solid financial performance of our portfolio, amidst the challenging backdrop of the COVID-19 pandemic. This validates Elite Commercial REIT’s investment proposition – our portfolio provides attractive and recession-proof cashflows backed by a uniquely counter-cyclical occupier, the DWP,” says Shaldine Wang, CEO of the manager.
“In fact, there was minimal business disruption as Jobcentre Plus locations remained open to process and disburse benefits to claimants during the recent lockdown in the UK, even as medical assessments, interviews or other face-to-face appointments were discouraged. The UK Government has also announced the doubling of on-site JobCentre Plus work coaches due to the severe economic fallout,” she adds.
In its outlook statement, the manager says it is looking to improve prospects for future income and capital growth, especially so, as it has been granted right of first refusal by one of its sponsors to acquire properties located in the UK.
As at 10.55am, units in Elite Commercial REIT are changing hands flat at 69 pence.
