Archive | A-Reit

Published 25 May 2011

Ascendas Funds Management (S) Ltd, manager of the Ascendas Real Estate Investment Trust, has submitted a bid of $S110 million for a 6253m² site at Fusionopolis within Singapore’s one-north masterplan region.

The bid – at $S17,592/m² land value for an industrial site on a long-term lease – was made under the Singapore Government’s industrial land sales programme for land released by the Jurong Town Corp. Ascendas’ development expectation puts a $S4400/m² built value on the site for 25,000m² gross floor area at a floor:area ratio of 4:1. The site has a 60-year land lease.

Ascendas, itself controlled by the Singapore Government, said A-Reit would develop the site into a suburban business facility comprising 60% business park space and 40% office space to cater to tenants in the infocomm technology & media industries as well as research & development activities in physical science & engineering.

One north, next to Singapore’s Science Parks 1 & 2, is a 200ha development in central Singapore where research facilities & business parks will be built to support growth in biomedical sciences, infocomm technology, media, physical sciences & engineering.

The masterplan classifies developments into industry-focused clusters – Biopolis, Fusionopolis, Vista Xchange, Mediapolis & Wessex Estate – to be developed in progressive phases over 20 years. The Biopolis & Fusionopolis clusters are developed in the first phase to build a strong foundation for the major industries and encourage organic growth in their neighbourhoods.

Vista Xchange has been designated as the premium business centre, residential & entertainment hub of one-north and Mediapolis will house Singapore’s media ecosystem, from incubation and r&d to content production, distribution &d playout, while Wessex Estate will be home to Singapore’s creative community.

A-Reit is Singapore’s first listed trust investing in business space & industrial real estate. It has a diversified portfolio of 93 properties in Singapore and total assets of $S5.4 billion.

Ascendas has a number of flagships around Asia which it’s developed, marketed & manages, including the Singapore Science Park, International Tech Park Bangalore, Ascendas-Xinsu in Suzhou and Dalian-Ascendas IT Park.

Ascendas launched the trust in November 2002 and had Sydney-based Goodman Group as a partner for 5 years – it pulled out in 2008 to develop its own Asian business park portfolio.

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 20 April 2011

In sharp contrast with property sector results in New Zealand, Singapore Government-controlled listed investor A-Reit (Ascendas Real Estate Investment Trust) reported boomtime returns for its March year this week.

Net income was up just 3.6% to $S233.7 million, but a net revaluation gain of $S344.8 million (a $53.7 million loss last year) took the after-tax total return to $S578.6 million – up 291%.

A-Reit reported gross revenue up 8.2% to $S447.6 million ($S413.7 million), net property income up 6.1% to $S339.4 million ($S320 million). Higher operating expenses arose from the increase in utilities cost and cessation of land rent & property tax rebates granted by the Singapore Government in 2009.

Ascendas launched the trust in November 2002 as Singapore’s first reit investing in industrial property & business space and has grown it to a portfolio of 93 Singapore properties, plus new ventures in China, worth $S5.4 billion. Sydney-based Goodman Group was a partner for 5 years, pulling out in 2008.

A-Reit said it raised a net $S393.3 million in new equity and further diversified sources of debt funding through the issuance of ¥9.6 billion 7-year notes due 2018, which had been swapped into $S148.4 million on a floating rate basis.

During the year it completed acquisition of Neuros & Immunos, a science park at Biopolis, for $S125.6 million; embarked on 3 asset-enhancement projects and its 11th development project (a design-build logistics facility), worth a total of S$132.9 million; and made a $S117.6 million forward purchase of a business park property in Shanghai.

Its portfolio occupancy was 96% at 31 March, 92.1% for its multi-tenanted properties, and rents for new tenants in its science & business parks were 17.2% up on a year ago.

Aggregate leverage at 31 March was 35.2%, with a weighted average borrowing cost of 3.46% compared to 3.94% a year ago.

Earlier stories:

23 November 2010: Singapore’s A-Reit to expand portfolio around Asia

21 October 2009: Singapore A-Reit bottom line down but business remains strong

14 March 2008: Goodman sells out of Singapore joint venture

3 December 2004: Ascendas-Reit rapidly spending its $S400 million capital-raising

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 23 November 2010

Singapore Government-controlled Ascendas Real Estate Investment Trust (known as A-Reit) said yesterday it had decided to explore investment opportunities around the rest of Asia.

Its manager has set up a representative office in Shanghai and said it would seek yield-accretive investment opportunities & potential capital appreciation, provide access to real estate markets where unitholders couldn’t efficiently gain access on their own, and provide unitholders with a geographically diversified portfolio and an opportunity to ride on growth in other Asian markets.

“The focus of investment will continue to be in the sub-segments of business & science park properties, logistics & distribution centres, warehouse retail properties as well as selected industrial facilities.”

Ascendas launched the trust in November 2002 as Singapore’s first reit investing in industrial property & business space and has grown it to a portfolio of 92 properties worth $S4.8 billion. Sydney-based Goodman Group was a partner for 5 years, pulling out in 2008.

Earlier stories:

21 October 2009: Singapore A-Reit bottom line down but business remains strong

14 March 2008: Goodman sells out of Singapore joint venture

3 December 2004: Ascendas-Reit rapidly spending its $S400 million capital-raising

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

Published 21 October 2009

Listed Singaporean property trust Ascendas Reit (A-Reit) said yesterday it grew distributable income by15.4% in the September quarter, from $S53.4 million to $S61.6 million, on net property income up 11.7% to $S81.1 million.

But fair-value changes in financial derivatives cost it just under $S9 million, reducing net income by 13.5% to $S50.9 million. The trust didn’t record any property valuation changes.

A-Reit said organic growth contributed about 42% of the increase in net property income. The trust has grown from 88 properties a year ago to 90. It completed 2 development projects in the latest quarter – the $S99 million Phase 2, Plaza 8 of the Changi Business Park and a $S24 million design-build logistics facility at the Airport Logistics Park – at 7.3% below budgeted development cost.

The occupancy rate for the portfolio was 96.8%, and 93.3% for multi-tenanted properties.

The trust has a $S175 million 9-storey hi-tech industrial building under way for SingTel due for completion in the fourth quarter, next to the Kim Chuan telecommunications complex already leased to SingTel.

Aggregate leverage has been cut from 41.4% a year ago to 30.5%, its interest rate cover ratio has been held at 4.8 times, NTA has fallen from S185c/unit to S160c/unit.

It refinanced CMBS due in August with existing unsecured credit facilities and said it had enhanced its financial flexibility by increasing the number of unencumbered properties in the portfolio to 31, worth $S2 billion. Its next refinancing is a $S300 million term loan facility due in March 2010.

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Attribution: Trust release, story written by Bob Dey for the Bob Dey Property Report.

Published 19 April 2009

A-Reit – the Ascendas Real Estate Investment Trust in Singapore – increased its net property income by 21.8% to $S296.6 million in the March 2009 year on revenue up 23% to $S396.5 million.

The trust completed 3 development projects, achieving a total revaluation gain of $S29.3 million. It increased distributable income/unit by 7.4% to S15.18c for the year. Distribution for the final quarter was down 12.5% to S3.23c/unit, but would have been up 3% if performance fees were paid in cash, as last year.

The management company said the overall occupancy rate was 97.8%. Occupancy in multi-tenanted properties rose from 94% to 95.3%. 14.1% of portfolio income is due for renewal this financial year.

At 31 March, A-Reit’s 89 properties had a $S4.4 billion book value. During the past year, it completed acquisition of 31 International Business Park & 8 Loyang Way 1 for a combined sum of $S271.8 million and completed the 15 Changi North Way, Pioneer Hub & 3 Changi Business Park Crescent development projects for $S178.2 million.

Its flagship properties include the Singapore Science Park, International Tech Park Bangalore, Ascendas-Xinsu in Suzhou & Dalian-Ascendas IT Park.

Ascendas is also a major real estate fund manager, focused on managing publicly listed property trusts & private real estate funds, investing in a diverse range of industrial & commercial real estate across Asia.

The trust manager said positive rental reversion in renewal rental rates was seen throughout the portfolio’s 4 sub-sectors, particularly for the business & science parks & hi-tech industrial sectors. Business & science rents were up 41.3% on previous contracted rates and hi-tech rose 31.4%. However, rates for new tenants fell from the third quarter to the fourth.

“This is in part due to the manager’s shift in strategic focus from maximising rental reversions to maintaining occupancy and retaining customers in view of the negative economic outlook.”

At 31 March, outstanding accounts receivable more than 2 months past due amounted to about $S189,000 – about 0.05% of gross revenue.

While A-Reit has experienced far better times in the past year than most property entities round the world, the good times may be coming to an end. Singapore’s Ministry of Trade & Industry said MTI estimated Singapore’s gdp would contract by 6-9% this year.

Earlier stories:

20 July 2008: Singapore A-Reit carries on growing

20 April 2008: A-Reit revaluations worth $S½ billion, outlook cautious

14 March 2008: Goodman sells out of Singapore joint venture

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Attribution: Trust release, story written by Bob Dey for the Bob Dey Property Report.

Published 20 July 2008

A-Reit, the Singapore property trust Goodman Group of Australia exited in March, carried on improving in the first quarter of its new financial year, to June.

The trust increased gross revenue by 19.6% to $S92.5 million, net property income by 20.1% to $S69.7 million, net income available for distribution by 15.9% to $S51.8 million, its distribution/unit by 15.4% to S3.89c and earnings/unit by 15.5% to S3.73c. Operating cashflow rose 58% to $S63.6 million. Net asset value rose from S180c to S184c.

A-Reit (Ascendas Real Estate Investment Trust) picked up unrealised revaluations of $494 million at the end of the financial year, in March, taking the trust’s total assets to $S4.2 billion & net assets to $S2.4 billion. At the end of the June quarter it had $S1.8 billion of borrowings against net assets of $S2.5 billion ($S2 billion a year earlier).

A-Reit increased its portfolio by 8 properties in a year to 86 properties in Singapore, worth $S4.36 billion, and has more than 800 tenants in 5 sectors – business & science park, hi-tech industrial, light industrial, logistics & distribution centres.

When Sydney-based Goodman Group sold out in March, Government company Ascendas Land (Singapore) Pte Ltd’s stake in the reit increased to 26.77% and Ascendas Pte Ltd took over 100% of the management company.

Goodman had 40% of the management company, which it sold for an undisclosed sum, and 6.28% of the trust, which it sold at $S1.90/unit, almost at the low point in the units’ price, which has since recovered to $S2.70 before falling back to $S2.10.

When the sale went through, Goodman’s share price of $A3.54 was half what it had been 6 months earlier. It got down to $A2.21 but closed this week at $A2.51.

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Attribution: Company release, story written by Bob Dey for this website.

Published 20 April 2008

The Singapore property investment venture Goodman Group has just exited, A-Reit (Ascendas Real Estate Investment Trust) reported a solid year for operations yesterday – and a boom year for revaluations.

Unrealised revaluations were worth $494 million, taking the trust’s total assets to $S4.2 billion & net assets to $S2.4 billion. The trust’s manager said 3 weeks ago revaluations would be 14.2% above book value at 29 February, making no mention of the increase over the whole year.

Economic detail provided by the Singapore Government’s Ministry of Trade & Industry shows the island nation had a strong year, and the ministry is still predicting gdp growth of 4-6% this year. However, A-Reit has expressed more caution about its prospects.

Sydney-based Goodman Group sold out of A-Reit in March, increasing Government company Ascendas Land (Singapore) Pte Ltd’s stake in the reit to 26.77% and giving Ascendas Pte Ltd 100% of the management company.

On gross revenue up 13.9% to $S322.3 million & net property revenue up 15.8% to $243.5 million, A-Reit increased net income available for distribution by 14.3% to $S187.3 million.

A-Reit’s distribution to unitholders for the March quarter is up 11.8% to S3.69c, and for the year it’s up 10.8% to S14.13c.

Net appreciation on revaluation of 82 investment properties rose 162%, from $S188.7 million in 2007 to $S494.1 million (unrealised). At balance date, A-Reit had 84 properties, up from 77 over the year.

The trust increased total assets over the year by 27% to $S4.2 billion, liabilities by 31.7% to $S1.8 billion, net assets by 23.8% to $S2.4 billion. A-Reit said its weighted average funding cost at 31 March was 3.103%.

Earnings/unit leapt in the fourth quarter because that’s when the revaluations were done, taking earnings from S14.05c/unit in the March 2007 quarter to S40.44c/unit this time. Earnings/unit for the year rose by 92.4%, from S26.24c to S50.49c. Net asset value rose by 23.5%, from S149c to S184c.

A-Reit said in its economic outlook the advance gdp estimates for the March 2008 quarter by the Ministry of Trade & Industry reflected an increase in the pace of growth of the Singapore economy from the last quarter of 2007, from 5.4% to 7.2%.

“The manufacturing sector is estimated to have expanded by 13.2%, resulting from the surge of output of the biomedical manufacturing sector. Overall growth was seen in the other manufacturing clusters, with the exception of transport engineering & precision engineering, whose growth moderated.

“Singapore’s economy expanded by 7.7% in 2007, down from 7.9% in 2006. Construction & services-producing sectors experienced the fastest growth.

“The upward trend of overall industrial property prices & rental rates (represented by the URA price & rental indices respectively) reflected the continued economic growth. The price index rose 6% and the rental index 7.8% in the December quarter. According to URA’s statistics released in January, occupancy rates improved across all sectors, with a marginal increase of 0.9% to 87.3% for factory space. Warehouse space occupancy rates improved from 90.3% in the September quarter to 91.5% in the December quarter. Average occupancy rate for the science & business park sector rose from 87.1% in September to 89.4% in December. Demand for business park space remains healthy.

Singapore’s open economy is expected to grow at a slower pace in 2008. The ministry estimates gdp growth for 2008 to be between 4-6%. With uncertainties over the global economic situation, according to a study by CBRE, the increase in rents & occupancy rates for hi-tech & business parks space are expected to continue at a less brisk pace due to limited upcoming supply. However, depending on the depth & length of the expected recession in the US, the impact on the Asian & Singapore economy is difficult to gauge at this time.”

Earlier stories:

27 March 2008: A-Reit valuations up 14.2%

14 March 2008: Goodman sells out of Singapore joint venture

Want to comment? Email [email protected].

Attribution: Company statement, story written by Bob Dey for this website.

Published 27 March 2008

A-Reit – the Singapore property investment trust which Sydney-based Goodman Group has just pulled out ofnow fully co0ntrolled by Singapore Government company Ascendas – lifted its valuations on 80 properties by 14.2% over book value at 29 February.

The net unrealised appreciation on revaluation of these investment properties amounts to $S483.6 million, which will be reflected in the trust’s accounts for the March year. The valuations were carried out by 4 international consultancies.

The trust said valuations rose in all sectors, with the business & science parks sector registering the largest appreciation of $S244.4 million. A-Reit also has investments in the hi-tech industrial, light industrial (including flatted factories) and logistics & distribution centres sectors.

A-Reit’s third development property, [email protected], completed in January, appreciated by 166% ($S43.2 million) above its total development cost.

Post-revaluation, the annualised NPI yield of the property portfolio is about 6.4%, in line with the prevailing market. The adjusted net asset value, based on the 31 December balance sheet, will be $1.85/unit.

Earlier story:

14 March 2008: Goodman sells out of Singapore joint venture

Want to comment? Email [email protected].

Attribution: Trust release, story written by Bob Dey for this website.

Published 14 March 2008

Singapore Government company Ascendas has bought Sydney-based Goodman Group out of their joint venture, the Singapore-focused A-Reit & its management company, with different prices on the acquisition provided by each party.

Ascendas Pte Ltd said it had bought Goodman Singapore Industrial Management (Aust) Pty Ltd’s 40% of the management company for cash (undisclosed), making the management company a wholly owned Ascendas subsidiary, while Ascendas Land (Singapore) Pte Ltd has bought Goodman Singapore Pte Ltd’s 6.28% of the real estate investment trust for $S158.16 million.

Goodman said it had sold its 40% of management for $S110 million and the reit units for $S172 million at $1.90/unit.

Ascendas will hold 26.77% of the reit units on completion, which was expected within 10 days of the 12 March signing.

A-Reit was listed in 2002 as Singapore’s first reit investing in industrial property & business space. It has built up an $S3.4 billion portfolio of 80 properties comprising business & science park properties, hi-tech industrial properties, light industrial properties and logistics & distribution centres.

Ascendas has also established a regional presence, with overseas real estate funds in India, China, Korea & South-east Asia.

Goodman Group chief executive Greg Goodman said the reit delivered a total return of 26%/year over the 5 years of the partnership. “This transaction brings to a close a very successful venture and clears the way for Goodman & Ascendas to pursue their own interests in the region.”

Goodman will use the proceeds to retire debt, reducing gearing by about 150 basis points. Mr Goodman said the profit (over cost) from the sale of the management exceeded $S90 million and the profit on the sale of the units exceeded $S60 million pre-tax. Those profits would be on top of group operating income, forecast to be A34c/share for the 2008 financial year.

Goodman’s share price has halved in the past 6 months, to $A3.54.

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Attribution: Ascendas & Goodman releases, ASX, story written by Bob Dey for The Bob Dey Property Report.

Published 14 January 2006

Singapore’s first real estate investment trust, A-Reit, increased its portfolio by $S600 million to $S2.7 billion in the 9 months to December but added only $200 million to borrowings.

A-reit – full name Ascendas Real Estate Investment Trust – is managed by a 60:40 joint venture between Singapore Government company Ascendas Pte Ltd & Macquarie Goodman Management Ltd of Australia.

The trust issued what it purported to be a quarterly report but was in fact a 9-month trading result, with no quarterly comparisons. The managers said on Friday A-reit’s gearing rose from 30.2% in March to 34.2% and net asset value rose from S123c/unit to S133c/unit.

The trust now has 60 properties, all in Singapore, the latest one bought on 3 January. The portfolio comprises suburban office space (including business park & science park properties), high-spec industrial mixed-use properties, light industrial properties and logistics & distribution centres.

A-reit bought 13 properties for $S288 million in the December quarter, paid $S5.8 million for its 3 January purchase and has signed put & call option agreements on 3 more properties for $S94 million.

At 31 December its occupancy rate was 94.7% (up from 94.1% a year earlier). Occupancy of its multi-tenanted buildings was 89.7% (89.5%).

The manager renewed or leased 52,868m² in the December quarter and the portfolio has a stable weighted average lease term of 6.7 years.

The trust has a 2-year interest rate cap of 2.5% on 15% of its debt ($S127.5 million of $S844 million) and a weighted average funding cost of 3.27%, including margins & weighted swap rates for hedged debt and current floating rates on unhedged debt, and amortisation of cmbs’ establishment & annual maintenance costs.

Assuming an optimal gearing limit of 45%, A-reit will have debt funding capacity of about $S500 million available to fund acquisitions.

If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

Attribution: Company statement & financial data, story written by Bob Dey for this website.