Ascott REIT Advances 10 Years Of Stellar Growth With Its Second Acquisition In New York For USD158 Million
2015 acquisitions amount to S$609 million
Singapore, 26 January 2016 – Ascott Residence Trust’s (Ascott Reit) revenue for 4Q 2015 rose 26% to S$119.2 million compared to 4Q 2014. This was mainly due to the additional revenue from its S$609 million worth of acquisitions in 2015, with the biggest boost from its first acquisition in New York. Its acquisitions in 4Q 2014 and stronger operating performance from existing properties also contributed to the revenue growth. Revenue per available unit (RevPAU) grew 17% to S$145 and gross profit increased 24% to S$56.8 million.
Unitholders’ distribution for 4Q 2015 was S$32.1 million while distribution per unit (DPU) was 2.07 cents, 18% higher than the adjusted DPU of 1.76 cents for 4Q 2014 which excluded one-off items of approximately S$6.1 million.
Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “In 2015, Ascott Reit’s aggressive acquisitions of quality assets significantly drove up its revenue. Our maiden acquisition in Times Square of New York was the biggest contributor, signifying strong demand in key gateway cities in the United States of America. We also acquired one serviced residence in Melbourne, four rental housing properties in Osaka, and the remaining stakes in two serviced residences in Tokyo and Kyoto. All these acquisitions, which amounted to S$609 million, were funded through various sources without any equity fundraising. As part of our active asset management, Ascott Reit divested six rental housing properties in the regional cities of Japan and one property in the Philippines for a total of S$60 million. This will enable us to reinvest the proceeds in other higher yielding assets to enhance Unitholders’ returns.”
Mr Lim added: “Ascott Reit is on track to achieve its target of S$6 billion by 2017. It is currently the largest hospitality REIT in Singapore with an asset size of S$4.7 billion, and it will grow to S$5.1 billion when its acquisition of the Cairnhill development is completed, which is expected to be in 2017. We will continue to actively seek accretive acquisitions in key cities of markets such as Australia, Japan, Europe and the United States of America.”
Mr Ronald Tay, ARTML’s Chief Executive Officer, said: “In 4Q 2015, RevPAU for several of our markets grew due to stronger demand from corporate clients. Indonesia was our top performer with RevPAU rising 18%1 and RevPAU for Vietnam increased 8%1 . We have seen strong recovery for Vietnam for the last two quarters and the market is expected to continue to improve. Japan’s RevPAU rose 8% 1 as there was increased demand from corporate and leisure travellers for our serviced residences.”
“We continued to create value for our properties and improve customer experience through refurbishments. For example, our renovated apartments at Somerset Xu Hui Shanghai saw higher demand, leading to a 35% jump in average daily rates. Average daily rates for our upgraded apartments at Somerset Ho Chi Minh City went up by 27%. Ascott Makati’s first phase of renovation is ongoing and the refurbishment of Citadines Barbican London will begin this quarter, and they are expected to be completed in 2Q 2016. We are constantly looking at ways to enhance our properties to maximise returns for Unitholders.”
Mr Tay added: “As part of our capital management strategy, we successfully issued S$250 million fixed rate perpetual securities in 2015 with orders exceeding S$1 billion. Proceeds from the issuance of perpetual securities were deployed to finance the acquisitions in Australia and the United States of America. In addition, we issued two tranches of seven-year fixed rate notes amounting to S$200 million and JPY7.3 billion respectively under our S$1 billion Medium Term Note Programme. We will continue to tap diversified funding sources to increase our financial flexibility as we pursue more growth opportunities.”
Summary of Results
4Q 2015 vs. 4Q 2014
Revenue for 4Q 2015 increased mainly due to the additional revenue of S$24.0 million from Ascott Reit’s acquisitions in 2015 and 2014, as well as S$1.0 million from the existing properties. The increase was partially offset by the decrease in revenue of S$0.8 million from the divestment of six rental housing properties in Japan in 3Q 2015.
Unitholders’ distribution in 4Q 2014 included one-off items of approximately S$6.1 million. DPU for 4Q 2014 would be 1.76 cents if it was adjusted for the one-off items.
Excluding the acquisitions, RevPAU for 4Q 2015 increased by 2% as compared to 4Q 2014 due to stronger performance from the properties in China, Indonesia and Vietnam.
FY 2015 vs. FY 2014
Revenue for FY 2015 increased mainly due to the additional revenue of S$66.1 million from Ascott Reit’s acquisitions in 2015 and 2014. The increase was partially offset by the decrease in revenue of S$1.1 million from the divestment of six rental housing properties in 3Q 2015, a decrease in revenue of S$0.7 million from the existing properties and a decrease in revenue of S$0.4 million due to the expiry of the deed of yield protection for Somerset West Lake Hanoi.
Unitholders’ distribution for FY 2015 included a one-off item of approximately S$1.2 million relating to the interest incurred on the S$250 million perpetual securities issued in June 2015 for the period prior to utilisation of the proceeds in 3Q 2015. DPU for FY 2015 would be 8.06 cents if the one-off item was excluded.
Unitholders’ distribution for FY 2014 included one-off items of approximately S$9.1 million. DPU for FY 2014 would be 7.61 cents if it was adjusted for the one-off items.
Excluding the acquisitions, RevPAU notched up by 1%
Ascott Reit’s distributions are made on a semi-annual basis, with the amount calculated as at 30 June and 31 December each year.
For the period of 1 January 2015 to 30 June 2015, Unitholders received their distribution of 3.847 cents per unit on 28 August 2015.
For the period of 1 July 2015 to 31 December 2015, Unitholders will receive their distribution of 4.138 cents per unit on 29 February 2016. The Book Closure Date is 3 February 2016.