Dear Unitholders,
On behalf of the Board of Directors of Ascendas Funds
Management (S) Limited (“AFM”), the Manager of
A-REIT, I am pleased to present A-REIT’s 13th Annual
Report for the financial year ended 31 March 2015.
RECENT EVENTS
I would like to congratulate our Sponsor,
Ascendas, on the partnership as announced
between Temasek and JTC Corporation (“JTC”).
This merger involving Temasek’s Singbridge Group
and JTC’s Ascendas, will strengthen the combined
group’s capability to participate in urbanisation
projects in the global market, particularly in Asia.
The merger has no immediate and direct impact on
A-REIT. A-REITwill continue to strengthen its presence
in the business space and industrial property sector.
We can continue to count on opportunities arising
from the Sponsor’s portfolio of more than S$1 billion
worth of properties in mainly the Business & Science
Park segment in Singapore.
A-REIT is proud to be part of the enlarged group.
We will review the possibilities of widened
options to realise our strategic mission to deliver
predictable distributions and achieve long-term
capital stability for Unitholders.
FY 2014/15:
ANOTHER SUCCESSFUL YEAR
A-REIT delivered another year of growth for the
financial year ended 31 March 2015 with full year
distribution per Unit (“DPU”) of 14.6 cents, an
increase of 2.5% over the previous year.
Our results were buoyed by positive rental
reversion of 8.3% for leases that were renewed
during the year, full year contributions from Nexus
@one-north and A-REIT City @Jinqiao, which were
new projects completed in 2013, as well as newly
acquired properties in FY14/15 such as Hyflux
Innovation Centre and Aperia. Higher occupancies
were achieved at Nexus @one-north, A-REIT City @
Jinqiao, Aperia and Hyflux Innovation Centre which
contributed positively to our improved results.
Assets Under Management
Assets under management (“AUM”) topped S$8
billion (+10.9 % YoY) following the acquisition of
three properties in Singapore for S$770.6 million
during the year. A-REIT continues to maintain a
leadership position as the largest listed business
space and industrial REIT in Singapore in terms
of AUM and market capitalisation. Total portfolio
gross floor area expanded 3.8% to 3.0 million sqm.
The acquisition of three properties – Aperia (costing
S$463.0 million), Hyflux Innovation Centre (S$193.9
million) and The Kendall (S$113.7 million) – is part of
A-REIT’s strategy to scale up exposure to the Business
& Science Park, Integrated Development and High-
Specifications segments from 56% to 64% of our
portfolio. Currently, these multi-tenant buildings
are well occupied by companies in higher value-add
businesses. These properties also sit on land with
long lease tenures ranging between 53-64 years.
Active Portfolio Management
A-REIT completed S$60 million worth of asset
enhancement projects in FY14/15. Currently,
another 4 enhancement projects are in-progress
with an estimated value of S$91.2 million.
These projects involve the upgrading of building
specifications, repositioning of assets to enhance
marketability and the maximisation of plot ratio.
Besides asset enhancements, we continuously look
to streamline our portfolio. No. 1 Kallang Place,
a 7-storey light industrial cum warehouse facility
with a remaining land tenure of about 10 years,
was divested for S$12.6 million. The transaction
realised a disposal gain of about S$0.4 million over
the original cost of investment. In April 2015, we
completed the divestment of 26 Senoko Way,
another light industrial property for S$24.8 million.
In addition to the completion of the brand new
integrated development, Aperia (committed
occupancy of 46% at TOP), several single-tenant
buildings were converted to multi-tenant buildings
during the year. As a result of the transitional
downtime arising from the conversions, portfolio
occupancy rate weakened to 87.7% compared to
89.6% a year ago.
Capital Strength
We maintained our strong balance sheet. Our
gearing remains comfortable at 34% and we
have hedges (68% of our outstanding interest
rate exposure is hedged for 3.7 years) in place to
mitigate the effects of rising interest rates.
Moody continues to maintain A-REIT’s credit rating
C H A I R M A N ’ S M E S S A G E
ASCENDAS REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2014/15
