Top 10 Tenants of A-REIT by Gross Rental Income (as at 31 March 2016)
CUSTOMER CREDIT &
CONCENTRATION RISK MANAGEMENT
To minimise tenant credit risk, a credit evaluation process has
been established to assess the creditworthiness of A-REIT’s
tenants. Based on standard industry practice, one month’s
worth of gross rental is usually held as security deposit for
each year’s lease. However, for long-term leases in single-
tenant properties, a larger sum of security deposit may be
held. This is dependent on the length of the lease, the credit
risks of such tenants and commercial negotiation. Security
deposits for A-REIT’s single-tenant properties range from five
months to eleven months of rental income equivalent. The
average security deposit for the portfolio is approximately 4
months of rental income.
With a tenant base of around 1,470 local and international
companies, rigorous and conscientious effort has been put
in to manage accounts receivables. About 81.8% of rental
receipts are collected via interbank GIRO services. This
enables us to react efficiently and appropriately towards any
delinquency in payment.
Top 10 tenants accounted for not more than 18.2% of A-REIT’s
gross rental income and the majority of these tenants are either
multinational or listed companies. Furthermore, no single
property accounts for more than 5.4% of A-REIT’s monthly
gross revenue, offering income diversity within the portfolio.
Singapore
Telecommunications
Ltd
Wesfarmers Group
Hydrochem
(S) Pte Ltd
DBS Bank Ltd
Ceva Logistics
S Pte Ltd
Biomedical Sciences
Institutes (A*Star)
Citibank, N.A
Siemens Pte Ltd
JPMorgan Chase
Bank, N.A
Hewlett Packard
Singapore (Pte) Ltd
4.7%
2.1% 2.0%
1.7%
1.5%
1.5%
1.2% 1.2%
1.2%
1.1%
The Manager further strengthened A-REIT’s balance sheet
with S$854.9 million equity funds raised through perpetual
securities and new Unit issue exercises.
The S$300.0 million perpetual securities, issued in October
2015, were unsecured and subordinated, and confer the
holders a right to receive non-cumulative distribution
payments of 4.75% per annum for the first 5 years at the
Manager’s discretion. Proceeds from issue of perpetual
securities were swapped into AUD and used to fund the
acquisitions of 26 logistics properties in Australia.
During the financial year, a total of 249.8 million new Units
were issued through a) an S$200.1 million private placement
in December 2015; b) an S$144.8 million preferential offering
in January 2016; and c) an issue of S$210.0 million worth of
consideration units to Ascendas Lands (Singapore) Pte Ltd,
raising gross proceeds of S$554.9 million. Proceeds were
fully deployed in accordance with the intended use.
On 13 May 2016, Moody’s Investor Services re-affirms
A-REIT’s A3 issuer rating.
Actual use of proceeds
(S$m)
To fund the acquisition of ONE@Changi City, together with the plant and property
therein and the associated costs
434.7
To fund the acquisition of 6-20 Clunies Ross Street, Pemulwuy, located in Sydney,
Australia and the associated costs
82.0
To fund debt repayment
35.4
To pay the fees and expenses incurred by A-REIT in connection with new Unit issuances
2.8
TOTAL
554.9
.39
A-REIT ANNUAL REPORT
2015/2016
