Ascendas India Trust reports higher occupancy at 90% for 1H 2022; DPU grows 2% y-o-y and 19% over 2H 2021
1 August 2022, Singapore - Ascendas Property Fund Trustee Pte. Ltd., the Trustee-Manager of Ascendas India Trust (a-iTrust or the Trust), reported the results of a-iTrust for the first half ended 30 June 2022 (1H 2022). Backed by an increase in occupancy in major IT Parks, distribution per unit (DPU) increased by 19% to 4.28 Singapore cents as compared to the second half ended 31 December 2021 (2H 2021).
Mr Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager, said:
"We are pleased to announce a DPU of 4.28 Singapore cents for 1H 2022, an increase of 19% from 2H 2021 and 2% year-on-year. Portfolio occupancy increased to 90%, backed by significant leases signed in International Tech Park Chennai (ITPC) and International Tech Park Bangalore (ITPB) as we added several quality tenants to its portfolio. ITPC saw the largest recovery in occupancy from 65% in December 2021 to 83% in June 2022; while in ITPB, occupancy increased from 91% to 95% during the same period. As India resumes normalcy, we are witnessing an increase in physical park population across our parks with 36% of the park population back to office as at end June.
Leasing and renewal volumes for our portfolio in 1H 2022 stood at approximately 1.3 million square feet, buoyed by strong year-on-year office leasing growth of 157% across India4. We are encouraged by the ongoing leasing interest and expect leasing momentum to further improve in the second half of 2022"
Financial Performance (1H 2022 vs 1H 2021)
In Indian Rupee terms, 1H 2022 total property income increased by 10% to ₹5.8 billion. This was mainly attributable to income from aVance 6 building in Hyderabad which was acquired in March 2021, income from Building Q1 in Aurum Q Parc, Navi Mumbai which was acquired in November 2021, income from Arshiya Warehouse 7 which was acquired in March 2022, income from the industrial facility in Mahindra World City, Chennai which was acquired in May 2022, and higher utilities and carpark income compared to the same period last year.
Total property expenses increased by 11% to ₹1.1 billion largely due to higher operational and maintenance expenses, partially offset by lower utilities expenses in the current period. Total property expenses were lower last year due to the reversal of excess provision for credit loss.
As a result, NPI increased by 9% to ₹4.6 billion while DPU increased by 4% to ₹2.39. In Singapore Dollar terms, DPU increased by 2% to 4.28 Singapore cents per unit.
Portfolio Performance and Capital Management
a-iTrust achieved a committed portfolio occupancy of 90% as at 30 June 2022. The Trust’s assets under management stands at S$2.5 billion as at 30 June 2022.
As at 30 June 2022, a-iTrust’s gearing ratio was 35%. Net of cash and cash equivalents, gearing would have been 32%. The Trust has ample total debt headroom of S$964 million5, and cash and undrawn committed facilities of S$320 million. 79% of a-iTrust’s total borrowings were effectively on a fixed-interest rate basis and 62% of these total borrowings were hedged into Indian Rupees.
Growth Initiatives
In March 2022, a-iTrust completed the acquisition of Arshiya Warehouse 7, a 0.33 million square feet warehouse at the Arshiya Free Trade Warehousing Zone, Panvel, Navi Mumbai. a-iTrust already owns six operating warehouses with a total leasable area of 0.83 million square feet in the same site. Similar to these six warehouses, the seventh warehouse will also be leased and operated by a subsidiary of the vendor for a period of six years.
In May 2022, a-iTrust acquired its maiden industrial facility at Mahindra World City, Chennai. This is a 0.42 million square feet facility which is fully leased to a leading international electronics manufacturer, validating our assessment of the demand for industrial assets in this micro-market. Further, in July 2022, a-iTrust announced the proposed acquisition of Phase 2 of the same project via a forward purchase. The proposed acquisition gives a-iTrust the opportunity to increase exposure to the industrial sector and expand our presence in Mahindra World City, a prime industrial corridor in Chennai.
Construction activities for existing projects, including the Trust’s committed forward purchase pipeline, are currently progressing well. The Trust expects Phase 1 of ITPH’s redevelopment to be completed by 4Q 2022. As at 30 June 2022, a-iTrust’s portfolio comprises of 15.5 million square feet of completed properties and land bank with total development potential of 8.5 million square feet6.
Notes:
1 Distribution per unit (income to be distributed) in Singapore Dollar terms.
2 Average exchange rates used in the income statement.
3 The Singapore Dollar appreciated by 1.3% and 1.1% respectively against the Indian Rupee.
4 CBRE Research
5 Based on the gearing limit of 50%.
6 Includes buildings under construction.