Ascott Reit's 1Q 2018 Unitholder's Distribution rises 16% to S$29.2 million
Ascott Reit's 1Q 2018 Unitholders' Distribution Rises 16% to S$29.2 Million
Singapore, 18 April 2018 – Ascott Residence Trust’s (Ascott Reit) Unitholders’ distribution for 1Q 2018 rose 16% to S$29.2 million. Its distribution per unit (DPU) for 1Q 2018 was 1.28 cents after adjustment for one-off items. This is an increase of 9% over 1Q 2017’s restated DPU of 1.17 cents following Ascott Reit’s rights issue in April 2017.
The increase in Unitholders’ distribution was due to contributions from acquisitions in 2017 and a realised exchange gain of S$1.6 million arising from the proceeds received from the divestment of two serviced residences in Shanghai and Xi’an of China, as well as the repayment of foreign currency bank loans with the divestment proceeds. For 1Q 2018, Ascott Reit’s gross profit went up by 3% to S$48.7 million, while its revenue grew 1% to S$112.8 million.
Mr Bob Tan, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “Ascott Reit continues to deliver stable returns to Unitholders in 1Q 2018 through its quality assets across Asia Pacific, Europe and the U.S. Ascott Reit’s four acquisitions in Singapore, Frankfurt, Hamburg and New York last year continue to contribute to higher gross profit. The healthy results for 1Q 2018 reflects the resilience of our geographically diversified and well-balanced portfolio. Half of our gross profit is contributed by stable income from master leases and serviced residences on management contracts with minimum guaranteed income, while the remaining is contributed by growth income through management contracts.”
He added: “As part of our portfolio reconstitution strategy, we completed in January 2018 the divestment of two serviced residences in Shanghai and Xi’an at 69% above property valuation, with a net gain of S$51.6 million. We distributed S$6.5 million, which is part of the divestment gain, in February 2018, and the remaining may be used to enhance Ascott Reit’s assets or fund potential investments. We will continue to seek accretive investments in gateway cities while actively identifying opportunities to unlock the value of assets and redeploy the capital to higher-yielding properties.”
Ms Beh Siew Kim, ARTML’s Chief Executive Officer, said: “Ascott Reit’s properties in markets such as Belgium, China, United Kingdom and Indonesia have achieved better operational performance. Belgium was the best performer with a 20% increase in RevPAU due to stronger demand, while the RevPAU for China grew 16% with the divestments of the two properties in Shanghai and Xi’an. RevPAU for the United Kingdom rose 7% due to greater leisure demand and higher revenue from the refurbished apartments at Citadines Barbican London. Stronger corporate demand also contributed to a 4% increase in RevPAU for Indonesia.”
“Guests can look forward to an enhanced experience at the newly renovated Sheraton Tribeca New York Hotel. We expect to complete the refurbishment of Ascott Makati, Citadines Trocadéro Paris, Citadines Anulfpark Munich, and Somerset Grand Hanoi this year, as well as Somerset Grand Citra Jakarta next year.”
The International Monetary Fund has forecasted a 3.9% growth in 2018, reflecting a positive global economic outlook. The U.S. Federal Reserve raised interest rates in March 2018, and expects two more hikes this year. New supply in some countries that Ascott operates in is likely to rise steadily, resulting in keen competition and a downward pressure on rates. Nevertheless, Ascott Reit continues to proactively manage its properties to stay competitive, and remains focused on delivering stable returns to Unitholders and prudent in its capital management.
Ms Beh added: “We continue to maintain a disciplined and prudent approach towards capital management, with about 86% of our total borrowings on fixed interest rates to hedge against potential rising interest rates. We have also commenced discussions with banks to refinance the debts due in 2018, ahead of their maturity dates. We will continue to monitor and manage our interest rate and exchange rate exposure.”
 Gross proceeds from the rights issue was used to part finance the remaining purchase price for Ascott Orchard Singapore and the acquisitions of Citadines City Centre Frankfurt and Citadines Michel Hamburg in 2017.
 Based on RevPAU in local currencies.
 “World Economic Outlook Update, January 2018: Brighter Prospects, Optimistic Markets, Challenges Ahead” (January 2018), International Monetary Fund
Refurbished apartment at Citadines Barbican London. RevPAU for the United Kingdom rose 7% due to greater leisure demand and higher revenue from the refurbished apartments at Citadines Barbican London.
Summary of Results
1Q 2018 vs. 1Q 2017
Revenue (S$ million)
Gross Profit (S$ million)
Unitholders' Distribution (S$ million)
DPU (S cents)
DPU (S cents)
(restated for one-off items)
DPU (S cents)
(adjusted for one-off items)
Revenue Per Available Unit
(1) DPU for 1Q 2017 has been restated for Ascott Reit’s rights issue, through which 481,688,010 units were issued on 11 April 2017. Gross proceeds from the rights issue was used to part finance the remaining purchase price for Ascott Orchard Singapore and the acquisitions of Citadines City Centre Frankfurt and Citadines Michel Hamburg in 2017.
(2) Unitholders’ distribution for 1Q 2018 included a realised exchange gain of S$1.6 million arising from the receipt of divestment proceeds and repayment of foreign currency bank loans with the divestment proceeds.