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Wed, 30 Jan 2019

Ascott REIT’s Q4 2018 Distribution Per Unit Increases 5%

Ascott Residence Trust’s (Ascott Reit) distribution per unit (DPU) increased 5% year-on-year to 2.15 cents in Q4 2018.

Unitholders’ distribution for FY 2018 reach a record high of S$154.8 million, a 2% increase from FY 2017. This was on the back of Q4 2018 Unitholders’ distribution rising 6% to S$46.5 million over Q4 2017.

Gross profit for Q4 2018 increased 3% to S$63.4 million due to higher revenue. Revenue grew 2% to S$136.5 million. This was mainly contributed by the additional revenue of S$0.4 million from Ascott Orchard Singapore acquired in October 2017 and higher revenue of S$2.7 million from existing properties, partially offset by the decrease in revenue of S$1.1 million from divestments. On a same-store basis, gross profit and revenue also increased. Ascott Reit’s revenue per available unit (RevPAU) for Q4 2018 increased 5% year-on-year to S$163.

lyf one-north Singapore, Ascott's first coliving property. Click to enlarge.

Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said, “As part of our proactive portfolio reconstitution strategy, we completed the divestment of two serviced residences in Shanghai and Xi’an in early 2018. The FY 2018 distribution included S$6.5 million, part of the net gains from the sale of these two properties. We also recently announced the sale of Ascott Raffles Place Singapore. These divestments will give Ascott Reit the financial flexibility to invest in new accretive opportunities that will enhance our portfolio and returns to Unitholders.”

In Q4 2018, Ascott Reit’s key markets with strong operating performance include the United States, China and Japan. Gross profit for the United States surged 17%2, underpinned by higher demand and increased revenue from the upgraded apartments at Sheraton Tribeca New York Hotel. In China, excluding the contribution from Citadines Gaoxin Xi’an and Citadines Biyun Shanghai that were divested in January 2018, gross profit grew 16%2 as there were more guests on long stay. Similarly, Japan’s gross profit rose 12% due to stronger corporate and leisure demand in Tokyo.

Ms Beh Siew Kim, ARTML’s Chief Executive Officer, said: “Enhancing Unitholders’ returns through proactive asset management, including refurbishing our properties and leveraging technology, continues to be our priority. Our refurbished properties have not only created a better experience for guests, average daily rates for these properties have also increased about 10% to 20% due to stronger demand. During the year, we completed the refurbishments for Ascott Makati, Citadines Arnulfpark Munich, Citadines Trocadéro Paris, Somerset Grand Hanoi and Sheraton Tribeca New York Hotel. We are also carrying out refurbishment works at Somerset Grand Citra Jakarta and Element New York Times Square West, to be completed this year.”

“While there are mixed views regarding further interest rate hikes in 2019, any possible increase is not expected to have any significant impact to Ascott Reit’s total returns. We maintain a disciplined and prudent approach towards capital management, with 80% of Ascott Reit’s total borrowings on fixed interest rates and a well-spread debt maturity where less than 5% of debt will mature in 2019. Ascott Reit’s gearing stands at a healthy 36.7%. We will continue to monitor and manage its interest rate and exchange rate exposure,” Ms Beh added.

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