Since the start of the year, companies are no longer required to report its financial results every quarter. They only need to do so on a half-yearly basis.

Blue chip REIT Ascendas REIT (SGX:A17U) was one of the many companies that have switched to half-yearly reporting. As such, the REIT only provided a brief update of its portfolio occupancy and debt profile, along with a business outlook for the first quarter ended 31 March 2020.

After trading hours yesterday, the REIT released its 1H results for FY2020 – the period of reporting was between 01 January and 30 June 2020.

In this post, you will find the REIT’s latest financial results, portfolio occupancy and debt profile, distribution payout to unitholders, and also my personal thoughts (which I am sharing for educational purposes.)

Let’s begin…

Key Financial Results (1H FY2019 vs. 1H FY2020)

1H FY20191H FY2020% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders (S$’mil)

Overall, it was a great set of results reported by the REIT (in my personal opinion.)

Gross revenue improved by 14.6% on a year-on-year (y-o-y) basis, mainly attributed by revenue contribution from the newly acquired 28 business park properties in the United States, as well as 2 Singapore business park properties – all acquired in December 2019.

Property operating expenses spiked by 28.5% y-o-y due to the newly acquired US business parks.

Consequently, the REIT’s net property income and distributable income to unitholders went up by 11.2% and 3.7% on a y-o-y basis respectively.

My Thoughts: As I have mentioned earlier on in this section, it was a good set of results reported by the REIT.

Portfolio Occupancy Rate (Q1 FY2020 vs. Q2 FY2020)

Moving on, let us take a look at the REIT’s portfolio occupancy profile as at the end of second quarter on 30 June 2020, compared against the REIT’s portfolio occupancy profile recorded at the end of the first quarter ended 31 March 2020:

Q1 FY2020Q2 FY2020
Portfolio Occupancy
Rental Reversion

My Thoughts: While portfolio occupancy saw a marginal 0.2 percentage point drop, I am happy to note that the REIT still managed to maintain a positive rental reversion on lease renewals.

Debt Profile (Q1 FY2020 vs. Q2 FY2020)

Just like its portfolio occupancy profile, I will be comparing the REIT’s debt profile reported in the second quarter with the first quarter, to find out if it has improved or deteriorated:

Q1 FY2020Q2 FY2020
Aggregate Leverage
Interest Coverage
Ratio (x)
Average Term to
Debt Maturity (years)
3.8 years3.6 years
Average Cost of Debt

My Thoughts: Other than a slight dip in its interest coverage ratio (from 5.0x in the previous quarter to 4.2x in the quarter under review), its debt profile remains largely resilient in my opinion.

With an aggregate leverage at just 36.1% as at 30 June 2020, there remains plenty of debt headroom for the REIT to make further yield-accretive acquisitions (should an opportunity to do so arises) before it reaches the regulatory limit of 50.0%.

Distribution to Unitholders (1H FY2019 vs. 1H FY2020)

Compared to the same period last year, the REIT’s distribution per unit fell 10.8% on a y-o-y basis to 7.27 cents/unit (1H FY2019: 8.153 cents/unit) due to a larger unit base – from 3.1b units in 1H FY2019 to 3.6b units in 1H FY2020 (resulted from the rights issue conducted in December 2019 to fund new acquisitions and to lower its aggregate leverage), along with a one-off distribution of rollover adjustments from prior years amounting to S$7.9m in 1H FY2019.

The record date for the distribution payout of 7.27 cents/unit will be on 03 August 2020, and payout date will be on 27 August 2020.

In Conclusion

I’m sure you will agree with me that this is a resilient set of results reported by the REIT – where we saw improvements in its financial results (on a y-o-y basis), with its portfolio occupancy remaining stable (plus positive rental reversions recorded for the second quarter – which in my opinion is impressive), along with a sound debt profile.

Related Documents

Disclaimer: At the time of writing, I am a unitholder of Ascendas REIT.

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