Ascendas REIT: 2H21 net property income rose 22 percent on Europe, Sydney acquisitions

The Grab headquarters in Singapore, which was completed as a build-to-suit space by Ascendas REIT in the second half of 2021. Credit: Ascendas REIT (Photo: RENDY ARYANTO/VVS.sg)The Grab headquarters in Singapore, which was completed as a build-to-suit space by Ascendas REIT in the second half of 2021. Credit: Ascendas REIT (Photo: RENDY ARYANTO/VVS.sg)

Ascendas REIT reported Tuesday its second half net property income rose 22.4 percent on-year to S$475.2 million on acquisitions of properties and the completion of the Grab headquarters development in July. 

In addition, the REIT noted it acquired the remaining 75 percent of Ascendas Fusion 5, or AF5PL, which owns the Galaxis property at Fusionopolis in Singapore, for S$534.4 million at end-June, making it a wholly owned subsidiary. 

Gross revenue for the six months ended 31 December increased 21.3 percent on-year to S$640.5 million, the REIT said in a filing to SGX. 

The distribution per unit (DPU) for the six month period came in at 7.598 Singapore cents, up 2.4 percent from 7.418 Singapore cents in the year-ago period, the filing said. The number of units increased to 4.20 billion at end-December from 3.71 billion at the end of the year-earlier period, the REIT said.

At the end of the second half, Ascendas REIT had 220 properties, compared with 200 properties at the end of 2020, the filing said.

Occupancy rises

The REIT acquired 11 logistics properties in Kansas City in November 2021 and bought a European portfolio in March 2021.

The portfolio’s occupancy rate rose to 93.2 percent at end-2021, from 91.7 percent at end-September, and leases renewed during the year posted a positive rental reversion rate of 4.5 percent, Ascendas REIT said.

For the full year, Ascendas REIT reported net property income grew 18.6 percent on-year to S$920.8 million on gross revenue of S$1.23 billion, up 16.9 percent on-year. The full-year DPU came in at 15.26 Singapore cents, up 3.9 percent on-year from 14.688 Singapore cents in 2020, the filing said. 

Outlook

William Tay, CEO and executive director of the REIT’s manager, said that after deploying more than S$2 billion in investments across the four existing markets, properties in new economy sectors such as technology, life science, data centers and logistics make up 81 percent of assets under management and contributed 78 percent of revenue for 2021. 

“Ascendas REIT is well-positioned to capture growth in the new economy,” Tay said in the statement.

The REIT’s four markets are Singapore, the U.S., the U.K./Europe and Australia.

Overall, however, the REIT pointed to an uncertain outlook. 

“The trajectory and future impact of the pandemic remains unpredictable,” Ascendas REIT said. 

“However, we believe the demand for our asset classes will remain healthy. The manager will continue to exercise prudence, maintain a strong balance sheet and proactively manage its S$16.3 billion portfolio to deliver sustainable returns for its unitholders.”

Read more about Ascendas REIT’s portfolio.