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ESR-REIT reports 2.7% lower DPU of 0.721 cents in 4QFY2021; 6.7% higher FY2021 DPU of 2.987 cents

·3-min read

Unitholders will receive their distributions on March 30.

The manager of ESR-REIT has reported a distribution per unit (DPU) of 0.721 cents for the 4QFY2021 ended December, 2.7% lower than DPU of 0.741 cents in the same period the year before.

The fourth quarter’s DPU has brought FY2021 DPU to 2.987 cents, 6.7% higher than the DPU of 2.80 cents in the FY2020.

Gross revenue in the FY2021 grew 5.0% y-o-y to $241.3 million mainly due to the absence of Covid-19 rental rebates to tenants. The higher revenue was also attributable to contribution from 46A Tanjong Penjuru, as well as the leasing up of certain properties during the year.

FY2021 net property income (NPI) increased 5.5% y-o-y to $173.3 million.

The year’s distributable income grew 15.4% y-o-y to $114.4 million, spread across 3.83 billion units. In FY2021, the applicable number of units for calculation of DPU grew by 8.2% y-o-y from 3.54 billion a year ago.

The higher distributable income was driven by the REIT’s higher NPI, lower borrowing costs and contribution from its 10.0% interest in ESR Australia Logistics Partnership.

Rental collection for FY2021 remains healthy at 99.5% of its total receivables.

As at end-December, the REIT’s portfolio occupancy rate increased 0.8 percentage points q-o-q to 92.0%, which is above JTC’s average of 90.1%.

The REIT’s weighted average lease expiry (WALE) stood at 2.7 years as at end-December.

Leasing activities during the year remained positive with many new leases secured from logistics, info-communications, semiconductor and manufacturing industries.

As at end-December, ESR-REIT has a weighted average debt expiry of 2.4 years and an aggregate leverage of 40.0%.

Looking ahead, the REIT expects the industrial leasing market to remain stable with new expansions and set-ups, particularly in the high-specs industrial and logistics sector.

“Bright spots in the semiconductor manufacturing and electronics sectors remain robust and are expected to continue to drive demand for high-specs space, spilling over to general industrial properties as industrialists scale up inventory to safeguard supplies against near-term disruptions and pandemic bottlenecks,” says the REIT in a statement released on Jan 26.

Adrian Chui, CEO and executive director of the manager says, “The pandemic and global supply chain disruptions have provided tailwinds in the industrial sector as industrialists adapt to a paradigm shift in the way goods are produced, delivered and consumed. Our steady FY2021 operating performance is reflective of these transformation efforts while we actively pursue growth opportunities through asset enhancements to reposition selected properties; value-accretive acquisitions of quality assets from our sponsor’s pipeline and third parties; and divestment of non-core assets.”

“Sustainability remains key to our business strategy as we fulfil our vision of delivering sustained returns and long-term value to our unitholders. Despite the continued pandemic and global supply chain uncertainties, our stabilised portfolio with contributions from our new acquisitions will enable us to grow our business and recycle capital into high returning opportunities, as we cement our interest in quality New Economy assets with embedded income potential,” he adds.

Unitholders will receive their distributions on March 30.

Units in ESR-REIT closed at 44.5 cents on Jan 26.


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