Ascendas REIT - Annual Report 2021

The Manager’s Review of FY2021 FINANCIAL PERFORMANCE FY2021 VS FY2020 FY2021 FY2020 Variance Number of Properties 220 200 – Gross Revenue (S$ million) 1,226.5 1,049.5 16.9% NPI (S$ million) 920.8 776.2 18.6% Total Amount Available for Distribution (S$ million) 630.0 538.4 17.0% DPU (Singapore cents) 15.258* 14.688 3.9% Applicable Number of Units (million) 4,129 3,666 12.6% Gross revenue for the full year ended 31 December 2021 (FY2021) rose by 16.9% y-o-y to S$1,226.5 million. The increase was mainly attributable to full year contribution from acquisitions in FY2020 and contributions from new acquisitions and completed development in FY2021. In FY2020, the acquisitions included 254 Wellington Road in Melbourne, Australia acquired in September and two office properties in San Francisco, USA, acquired in November. In FY2021, new acquisitions included 1-5 Thomas Holt Drive in Sydney, Australia, in January; 11 data centres located across Europe in March; the remaining 75% interest in Galaxis located in Singapore in June; and 11 logistics properties in Kansas City, USA, in November. Thebuilt-to-suit development of Grab’s Headquarters in Singapore, which completed in July 2021, also contributed to the higher gross revenue. FY2021 net property income rose by 18.6% y-o-y to S$920.8 million in tandem with the increase in gross revenue. The total amount available for distribution in FY2021 rose 17.0% y-o-y to S$630.0 million. This was mainly due to the increase in NPI, partially offset by (i) performance fee of S$7.4 million payable to the Manager and (ii) an increase in non-property operating expenses and tax expenses attributable to the new acquisitions and completed development. DPU rose 3.9% y-o-y to 15.258 cents after performance fee. DPU was 15.438 cents (+5.1% y-o-y) before performance fee. Included in the amount available for distribution was approximately S$7.4 million (DPU of 0.1799 cents) of income support in relation to certain properties that was received and paid to Unitholders in FY2021. CAPITAL MANAGEMENT Ascendas Reit’s prudent capital management not only ensured adequate liquidity during the uncertain business environment, but also enabled the trust to execute its acquisition plans. Ascendas Reit’s capital profile is sound. Aggregate leverage is healthy at 35.9% and the trust is well positioned to seize investment opportunities when they arise given the large debt headroom of about S$4.8 billion before aggregate leverage reaches Monetary Authority of Singapore’s (MAS) regulated aggregate leverage limit of 50.0%. The Manager continues to keep a well spread debt maturity profile to minimise refinancing risks. Weighted average term of debt is 3.5 years and weighted average all-in borrowing cost improved to 2.2% per annum. A high level of natural hedge of approximately 76% is put in place for all overseas investments to minimise the effects of adverse exchange rate fluctuations. To minimise the impact from the volatility of interest rate movements, approximately 79.4% of Ascendas Reit’s borrowing are fixed with a weighted average term of 3.6 years. Ascendas Reit continues to maintain its A3 issuer rating from Moody’s. On 23 June 2021, Ascendas Reit issued its inaugural €300 million 7-year 0.75% Eurobond under the S$7.0 billon EuroMedium Term Securities Programme to further diversify its sources of funding and reach out to a wider investor base. In FY2021, Ascendas Reit increased its commitment to green financing with (1) three inaugural green USD bank loans totalling US$449 million, (2) a green A$206 million bank loan and (3) an inaugural US$150 million green interest rate swap. * DPU after performance fee Annual Report 2021 35