Ascendas REIT (SGX:A17U), with properties in Singapore, Australia, the United States, as well as in the United Kingdom, held its annual general meeting for the financial year ended 31 December 2020 (i.e. FY2020) this afternoon (29 April 2021).
Due to the current safe distancing measures in place, the meeting was held virtually, and there weren’t any live questions and answers section. The meeting was also a relatively short one, lasting approximately 20 minutes from start to finish, with the CEO of the REIT, Mr William Tay giving a short presentation, followed by the Chairman of the REIT, Dr Beh Swan Gin going through the resolutions that were put to vote during the meeting.
For the benefit of those who did not attend the meeting, in this post, you will find a summary of Mr Tay’s presentation, along with results of the 4 resolutions put to vote:
Summary of Presentation by the REIT’s CEO, Mr William Tay
- Despite a challenging environment in FY2020 (due to the Covid-19 pandemic), Ascendas REIT still managed to record an increase in its distributable income by 6.7% to S$538.4m (FY2019: S$375.4m), which Mr Tay attributed this to the revenue contribution from the newly acquired properties in 2019 as well as in 2020.
- Distribution per unit for the whole of FY2020 was at 14.688 cents, a 6.1% y-o-y decline compared to the previous year. Mr Tay added the REIT did not withhold any distribution payout at any point in time.
Acquisitions (between FY2020 and Q1 FY2021):
- Mr Tay shared that a total of S$2.3b worth of acquisitions have been announced between the entire financial year 2020 and in the first quarter of financial year 2021, and they include:
- Singapore: A 25% stake in a business park in Singapore for S$104.6m in March 2020
- Australia: 2 logistics properties in Australia for S$90.2m, with developments completing in 2021, as well as 2 suburban offices in Australia for S$445.0m – where 1 is acquired in January 2021, and the other with developments completing in 2022
- Europe: 11 data centres in Europe for S$904.6m in March 2021
- United States: 2 offices for S$768.0m in November 2020
Development, Redevelopment, and Asset Enhancement Works:
- Mr Tay shared that, apart from the 7 asset enhancement initiatives in Singapore and Australia which were already completed, the following asset enhancement works are currently in progress (with the completion in brackets):
- Development works for 1 built-to-suit business park development for Grab (scheduled to be completed in Q3 FY2021)
- Redevelopment works in UBIX and iQuest@IBP (scheduled to be completed in Q4 FY2021 and Q1 FY2023 respectively)
- Asset enhancement initiatives in 21 Changi South Ave 2 (to be completed in Q2 FY2021), 100 & 108 Wickham Street in Australia (to be completed in Q2 FY2021), Changi Logistics Centre (to be completed in Q2 FY2022), and Hansapoint (to be completed in Q1 FY2022)
- Aggregate leverage improved from 35.1% (as at 31 December 2019) to 32.8% (as at 31 December 2020), which Mr Tay described it as healthy. Also, there remains a debt headroom of approximately S$5.0b before its aggregate leverage reaches 50.0%.
- Moody’s rating maintained at A3, which Mr Tay said the high rating gives the REIT a strong access to capital.
- In terms of the REIT’s debt maturity profile, Mr Tay shared that it is well-spread out, with no more than 20.0% of debt due for refinancing in any given year.
- Also, to minimise the effects of adverse exchange rate fluctuations, the REIT maintained a high natural hedge for Australia (~70%), the United Kingdom (~100%), and in the United States (~60% as at 31 December 2020, but Mr Tay updated that it has been increased to ~89% in Q1 FY2021.)
Portfolio Occupancy Profile:
- Mr Tay shared that the REIT’s portfolio occupancy rate remains stable both on portfolio level (at 91.7%), as well as on country level (at 88.4% in Singapore, 92.9% in the United States, 97.4% in Australia, and 97.5% in the United Kingdom.)
- Total portfolio rental reversions for FY2020 was at +3.8%, which Mr Tay added it was in-line with the guidance throughout the financial year.
- Its portfolio weighted average lease expiry have increased from 3.9 years in FY2019 to 4.1 years in FY2020.
- Tenant concentration risk remains low, with its top 10 customers accounting for about 20.4% of the REIT’s monthly portfolio gross revenue. Mr Tay also added that the REIT’s diversification efforts can help to reduce its risk exposure to a single industry, and in so doing, help to generate a more stable income stream.
- In conclusion, Mr Tay said that the REIT’s priority is to keep building a stronger and profitable portfolio for the longer term.
Results of the 4 Resolutions Put to Vote during the Meeting
- Resolution 1, which is to receive and adopt the Trustee’s Report, the Manager’s Statement, the Audited Financial Statements of Ascendas Reit for the financial year ended 31 December 2020 and the Auditors’ Report thereon, was passed with 99.80% (or 2,504,914,022) of the votes for, and 0.20% (or 5,071,226) of the votes against.
- Resolution 2, which is to re-appoint Ernst & Young LLP as Auditors of Ascendas Reit to hold office until the conclusion of the next AGM of Ascendas Reit, and to authorise the Manager to fix their remuneration, was passed with 99.75% (or 2,542,167,940) of the votes for, and 0.25% (or 6,402,909) of the votes against.
- Resolution 3, which is to authorise the Manager to issue Units and to make or grant convertible instruments, was passed with 86.95% (or 2,218,329,847) of the votes for, and 13.05% (or 332,968,911) of the votes against.
- Resolution 4, which is to approve the renewal of the Unit Buy-Back Mandate, was passed with 99.97% (or 2,550,195,714) of the votes for, and 0.03% (or 774,338) of the votes against.
- Questions Submitted by Unitholders, along with Responses by the REIT’s Management
- Presentation Slides
Disclaimer: At the time of writing, I am a unitholder of Ascendas REIT.
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