Ascendas India Trust posts FY 2021 DPU of 7.80 Singapore Cents
Summary of a-iTrust Results
Exchange rate movements
26 January 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 second half and financial year ended 31 December 2021 (“2H FY 2021” & “FY 2021”). Despite the challenging operating environment in 2021 due to the COVID-19 pandemic, full year net property income (“NPI”) rose by 5% to S$155.7 million. FY 2021 DPU decreased by 11% to 7.80 Singapore cents in part due to the higher DPU in FY 2020 arising from one-off reversal of dividend distribution tax provision.
Mr Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager of Ascendas India Trust, said:
"Since India’s second wave of COVID-19 outbreak which peaked in June 2021, we saw a gradual increase in physical occupancy across our parks with about 11% of the park population back to office by year end. With the uncertainty due to the Omicron variant, we are closely monitoring and supporting our tenants’ back-to-office arrangements, keeping their well-being and safety in our business parks as our key priority.
Despite the challenging leasing environment, approximately 2.8 million square feet of our portfolio was leased or renewed in 2021 through our active tenant engagement efforts. Portfolio rental reversion was positive at 5.5%. Office rental collections remain robust at 98%4. We are encouraged by the early signs of leasing interest and expect leasing momentum to pick up based on ongoing tenant discussions. To strengthen portfolio resilience and enhance sustainable returns to our Unitholders, we are actively undertaking asset enhancements and strategically diversifying to new economy assets such as data centres and logistics/industrial facilities.”
Financial performance (FY 2021 vs FY 2020)
In Indian Rupee terms, FY 2021 total property income increased by 4% to ₹10.6 billion. This was mainly attributable to income from Anchor Annex building in Bangalore which was completed in November 2020, income from aVance 6 building in Hyderabad which was acquired in March 2021, partially offset by lower portfolio occupancy and lower utilities and carpark income as physical park population remained low on COVID-19 concerns during the year.
Total property expenses decreased by 13% to ₹2.0 billion largely from reduced operational expenses and reversal of expected credit losses. These factors contributed to the 8% increase in net property income of ₹8.6 billion. FY 2021 DPU decreased by 11% to 7.80 Singapore cents largely due to the absence of one-off reversal of dividend distribution tax provision in FY 2020, higher finance costs for funding new investments, partially offset by the increase in NPI.
Portfolio performance and Capital management
a-iTrust achieved a committed portfolio occupancy of 87%5 at 31 December 2021. The Trust’s portfolio valuation increased by 18% to S$2.4 billion from a combination of new acquisitions, development and fair value gains. Excluding new acquisitions in 2021, value of existing properties grew by 9%.
As at 31 December 2021, a-iTrust’s gearing ratio was 35%. The Trust has ample total debt headroom of S$960 million6 and cash and undrawn committed facilities totalling S$254 million. 75% of a-iTrust’s total borrowings were effectively on a fixed-interest rate basis. 64% of these total borrowings were hedged into Indian Rupees.
Growth initiatives
In October 2021, a-iTrust completed its acquisition of a 6.6-acre greenfield site in Airoli, Navi Mumbai for planned development of a fully-fitted data centre campus with up to 90 megawatts of sanctioned power. Phase 1 of the development, a building with potential built-up area of 0.33 million square feet, is expected to be operational by the third quarter of 2024.
In November 2021, a-iTrust acquired Building Q1, a 0.62 million square feet multi-tenanted IT SEZ building in Aurum Q Parc, Navi Mumbai at an attractive valuation for a gross consideration of approximately INR3.53 billion (S$64.1 million7). While Building Q1’s leasing commitment is below portfolio average, we expect to the asset to be substantially leased by 2023.
Construction activities for existing projects, including the Trust’s committed forward purchase pipeline, are currently progressing well. As at 31 December 2021, a-iTrust’s portfolio comprises of 15.0 million square feet of completed properties and land bank with total development potential of 8.3 million square feet8.
Notes:
1 Distribution per unit (income to be distributed) in Singapore Dollar terms.
2 Average exchange rates used in the income statement.
3 The Singapore Dollar appreciated by 3.0% against the Indian Rupee.
4 Figure for 4Q 2021 billings collection status as at 21 January 2022. Excluding Building Q1 in Aurum Q Parc which was acquired in late 2021, 99% of October, 97% of November and 95% of December billings were collected.
5 Excludes Mariner building in International Tech Park Hyderabad which has been vacated for redevelopment and includes the newly acquired Building Q1 in Aurum Q Parc, Navi Mumbai.
6 Based on the gearing limit of 50%.
7 Based on exchange rate of S$ 1 : INR55.0
8 Includes buildings under construction.