Singapore’s first and largest listed business space and industrial REIT in Ascendas REIT (SGX:A17U) have made available its annual report for the financial year ended 31 December 2021 early this morning (06 April 2022.)
As a unitholder of the blue-chip REIT (the REIT is one of the constituents in Singapore’s benchmark Straits Times Index), I have studied the report and, in this post, you’ll find a summary of the salient points to take note of, along with details about its upcoming annual general meeting (AGM):
FY2021 Performance Highlights:
- Gross revenue and net property income climbed 16.9% and 18.6% to S$1,226.5m (FY2020: S$1,049.5m) and S$920.8m (FY2020: S$776.2m) respectively, mainly attributable to full year contributions from acquisitions in FY2020 and contributions from new acquisitions and development in FY2021.
- Distributable income to unitholders rose 17.0% to S$630.0m (FY2020: S$538.4m), mainly due to the increase in net property income, partially offset by performance fee (S$7.4m) and an increase in non-property operating expenses and tax expenses attributable to new acquisitions.
- As the Manager voluntarily waived part of its performance fee to offset the effect of rental rebates mandated by the Singapore government, unitholders received a higher full-year distribution per unit (or DPU) of 15.258 cents, an increase of 3.9% over the previous year (after performance fee) of 14.688 cents.
- Portfolio recorded a higher occupancy rate of 93.2% as at 31 December 2021 (compared to 91.7% as at 31 December 2020), as well as rental reversions of +4.5% for leases that were renewed during the year.
- Aggregate leverage remains healthy at 35.9%, with Ascendas REIT continuing to maintain its A3 issuer rating from Moody’s, placing them in a good position to tap on a wide variety of funding sources and obtain competitive rates to fund future growth. During the year, the REIT have taken advantage of the low interest rates in 2021 to lower their aggregate average all-in borrowing cost to 2.2% (from 2.7% a year ago.) Additionally, 79.4% of their total borrowings, interest rates have been hedged for an average term of 3.5 years.
- Ascendas REIT had successfully executed a record of S$2.1b worth of new investments (acquisition of 1-5 Thomas Holt Drive in Sydney, Australia, 11 Data Centres across 5 cities in UK and Europe, a 75% interest in Galaxis in Singapore, 11 logistics properties in Kansas City, USA, along with the completed development of Grab Headquarters in Singapore), all of which were part of its plan to steer their portfolio mix to meet the evolving needs of their existing and potential customers.
- The most sizeable acquisition was for a portfolio of 11 data centres which are predominantly located in 3 of the top data centre markets in Europe (London, Amsterdam, and Paris), and data centres now constitute 9% of their total investment properties of S$16.3b.
Progress on Sustainability Agenda:
- Ascendas REIT continues to hold the largest number of BCA Green Mark Building certifications among the Singapore REITs at 40. Globally, it has 49 green certified properties (up from 39 a year ago.)
- Amount of solar energy generated from their rooftop solar farms in Singapore went up to approximately 11,600 mWh (from 10,355 mWh in 2020.)
- Largest number of public electric vehicle charging points in Singapore by a Singapore REIT at 76 across its 16 properties. Across its global portfolio, it currently has a total of 227 electric vehicle charging points.
- Secured an additional S$811.4m in green USD and AUD bank loans and entered into an inaugural S$203.0m green interest rate swap in FY2021. Green financing now accounts for an approximately 20.0% of Ascendas REIT’s total borrowings.
- Achieved an ‘A’ rating and ranked first among the Singapore REIT peers for GRESB (an investor-led organisation providing standardised and validated ESG data) Public Disclosure 2021, as well as being ranked in 3rd place on Singapore’s Governance and Transparency Index 2021 (REITs and Business Trust Category.)
- Many countries have gradually reopened their economics and are pivoting towards an endemic strategy, along with the progressive roll out of vaccinations and as such, the REIT’s management is cautiously optimistic that their investment markets will remain stable and continue to provide them with growth opportunities.
Details of Upcoming AGM:
Ascendas REIT will be holding its AGM on Thursday, 28 April 2022, at 10.00am. Due to the current safe management measures in place, the meeting will be conducted virtually, and unitholders can register to attend here (the deadline to do so will be on Monday, 25 April 2022, at 10.00am.)
As a unitholder of the blue-chip REIT, I have registered to attend the meeting, and as usual, I will be providing a summary of it in due course.
Disclaimer: At the time of writing, I am a unitholder of Ascendas REIT.