CHAIRMAN’S MESSAGE
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 14
th
Annual Report for the
financial year ended 31 March 2016.
INVESTING INTO THE FUTURE: DEEPENING OUR REACH
In FY15/16, A-REIT made its first significant move into
Australia, acquiring 26 premium logistics properties for
A$1.0 billion. Shortly after, the 27
th
logistics property in
Sydney was acquired for A$76.6 million.
All in all, we now have 670,000 sqm of logistics space, giving
us immediate scale and establishing A-REIT as the eighth
largest industrial landlord in Australia. We plan to continue
to look for opportunities and expand our footprint there.
FY2015/16 PERFORMANCE
I am pleased to report that A-REIT achieved a full year
distribution per Unit (DPU) of 15.357 cents, an increase of
5.2% over the previous financial year.
The improvement was driven by contributions from a) newly
acquired properties – the 27 Australian properties, Aperia,
The Kendall, Hyflux Innovation Centre and ONE@Changi
City, b) improvement in occupancy at Aperia, and c) positive
rental reversion of 7.0% for multi-tenant properties in the
Singapore portfolio.
DIVERSIFICATION STRATEGY
Following the Australian and Singapore acquisitions, A-REIT’s
total assets reached S$9.9 billion, further reinforcing A-REIT’s
status as Singapore’s largest listed business space and
industrial REIT.
These high-quality and well-located properties are expected
to enhance the resilience of A-REIT’s portfolio. Weighted
average lease expiry held steady at 3.7 years. The number
of tenants increased to 1,470, and more importantly, we
diversified the tenant mix further.
The Australian portfolio, which is on freehold land, will form
11% of A-REIT’s total portfolio by asset value. To ensure
operational efficiency, we have set up a local team headed by
Mr Matthew Meredith as the General Manager. In addition to
ensuring we provide excellent customer service, Matthew and
his team will seek more accretive and quality acquisitions in
Australia to further build scale, and improve profitability.
PORTFOLIO RECYCLING AND REJUVENATION
Two development projects, DBS Asia Hub Phase 2 (in
Singapore) and Jiashan Logistics Facility (in China) worth
S$43.9 million were completed, alongside with S$96.0
million worth of asset enhancement projects in Singapore.
These projects added over 42,810 sqm of additional GFA
to the portfolio.
We also continued to rationalise and improve the mix of our
portfolio. Two properties (26 Senoko Way and BBR Building)
were divested for a total of S$38.7 million, realising a total
disposal gain of S$15.7 million over original costs. Four Acres
Singapore was also divested for S$34.0 million in April 2016.
FUNDING AND CREDIT RATING
To support the acquisitions, a record S$1.5 billion of
funds were raised by tapping various funding sources
such as Australian dollar syndicated term loan, perpetual
securities, private equity placement, preferential offering
and consideration units.
We continue to enjoy the A3 credit rating by Moody’s.
BOARD AND MANAGEMENT RENEWAL
During the year, two members, including the CEO of AFM
Tan Ser Ping, retired from the Board. Five new members,
including the new CEO of AFM, joined the Board.
I would like to take this opportunity to thank Ser Ping for his
outstanding service and contributions. Ser Ping has been
leading A-REIT and AFM for 12 years. Over this period,
the number of properties has grown from 16 to 133. The
total assets has grown from S$1.0 billion to about S$9.9
billion today. The compounded annual growth rate is about
21%. When A-REIT was first listed, the market capitalisation
was S$468 million and as of 31 March 2016, the market
capitalisation is S$6.4 billion. This is quite a remarkable
achievement. This set of figures clearly demonstrates Ser
Ping’s impressive achievements as the CEO of AFM. On
behalf of the Manager and the Board, I want to express my
deep appreciation for Ser Ping’s devotion and contributions
to AFM and wish him the very best for his future.
.10
A-REIT ANNUAL REPORT
2015/2016
