ESR-REIT reports 3Q19 net property income more than doubled after Viva Trust merger

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ESR-REIT reported Friday its third-quarter net profit jumped 101.1 percent on-year to S$45.3 million on the acquisition of Viva Trust’s nine properties, the leasing of the 30 Marsiling property after completing an asset enhancement in January and rental escalations in the existing portfolio.

Gross revenue for the quarter ended 30 September increased 91.5 percent on-year to S$62 million, the REIT said in a filing to SGX.

The distribution per unit (DPU) for the quarter was 1 Singapore cent, down 0.4 percent from 1.004 Singapore cents in the year-ago quarter, the filing said.

“The decrease was mainly attributed to a larger unit base resulting from the placement of new units and longer-than-expected completion for the acquisition of 49 percent interest in PTC Logistics Hub against the backdrop of trade war uncertainties,” the REIT said.

The annualized distribution yield was 7.5 percent, based on the closing unit price of S$0.53 on 30 September, the REIT said.

Occupancy remained stable at 91 percent, above JTC’s average of 89.3 percent, ESR-REIT said.

For the nine-month period, ESR-REIT reported net property income of S$141.7 million, up 103.2 percent on-year, on gross revenue of S$190.5 million, up 93.4 percent on-year. The nine-month DPU was 3.011 Singapore cents, up 5.6 percent from 2.852 Singapore cents in the year-ago period, the filing said.

ESR-REIT’s portfolio had 57 properties in Singapore as of end-September, including the PTC Logistics Hub property.

Adrian Chui, CEO and executive director of the REIT’s manager, pointed to concerns on the horizon.

“To-date, we have continued to receive strong leasing interest and enquiries due to the property’s close proximity to the upcoming Tuas Megaport, slated to become the world’s largest fully automated terminal when completed in 2040,” Chui said in the statement.

“Headwinds such as uncertainty over the status of U.S.-China talks and weak global demand have started to affect business performance of industrialists, contributing to negative business sentiments which is expected to impact demand for space in the short-to-medium term,” he added.

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