About 21.9% of A-REIT’s portfolio comprises long-term leases in single-tenant properties as a result of sale-and-leaseback or built-
to-suit transactions. These leases provide stability in earnings growth as 32.5% of such leases have rental escalation pegged to
the Consumer Price Index with a fixed rate floor while the rest have varying quantums of periodic escalation. The other 78.1%
comprises multi-tenant buildings with typically three-year leases without any rental adjustments during their tenure. The rental
rates for such leases are marked-to-market upon renewal and provide an opportunity for increase in earnings in an upmarket. The
weighted average lease to expiry for the portfolio is 3.8 years as at 31 March 2015.
About 18.1% of A-REIT’s gross rental income is due for renewal. 3.8% are leases of single-tenant buildings and 14.3% are leases
of multi-tenant buildings. The Manager is proactively working on the renewal of these leases.
OCCUPANCY
As at 31 March 2015, the occupancy rate for A-REIT’s overall portfolio and multi-tenant buildings stood at 87.7% and 83.0%
respectively (from 89.6% and 83.6% as at 31 March 2014). The weaker YoY occupancy rate was mainly due to the transitional
downtime arising from the conversion of several single-tenant buildings into multi-tenant buildings as their leases expired. However,
multi-tenant building occupancy on a same store basis improved from 83.6% to 85.6%. We will continue to exploit our leasing
capabilities to improve occupancy within the portfolio to achieve organic growth for the portfolio.
Occupancy Trend
As at
31 March 2015
31 March 2014
Percentage Change
Total portfolio GFA (sqm)
2,992,186
(1)
2,881,879
+3.8%
Total portfolio NLA (sqm)
2,463,677
(1)
2,376,561
+3.7%
Portfolio occupancy (same-store)
(2)
87.7%
89.4%
-1.7%
Multi-tenant building occupancy (same-store)
(2)
85.6%
83.6%
+2.0%
Portfolio occupancy
87.7%
89.6%
-1.9%
Multi-tenant building occupancy
83.0%
83.6%
-0.6%
Notes:
(1) Excludes 2 Senoko South Road which has been decommissioned for asset enhancement works.
(2) Same-store occupancy rates for 31 March 2015 and for 31 March 2014 are computed with the same list of properties as at 31 March 2015, excluding new
investments completed in the last 12 months and changes in classification of certain buildings from single-tenant to multi-tenant buildings.
ANNUAL REVALUATION
It is a mandatory requirement to revalue the portfolio once a year. On 31 March 2015, the portfolio recorded a net appreciation
of S$47.0 million over the latest book value on revaluation of its investment properties. The weighted average capitalisation rate
remained stable at 6.46% for A-REIT’s Singapore portfolio.
Weighted average land lease to expiry for the portfolio of properties (excluding freehold properties) is 46.3 years. As at 31 March
2015, 64 properties worth about S$3.7 billion are on a land rent basis. These properties on land rent will only have a nominal land
value component in their book values.
M A N A G E R ’ S R E P O R T
ASCENDAS REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2014/15
