Ascendas Real Estate Investment Trust (A-REIT) is handing out 3.48 cents for every unit for the Q2 ended September, which showed a 13.2 percent fall on-year.
However, compared to last year during the same period, the total distributable income of A-REIT has increased to 15.4 percent at S$61.6 million this year.
The recorded fall in the distribution per unit this year is primarily attributed to the share dilution following the private placement of several new units last August.
According to A-REIT, its rate of occupancy marginally declined to 96.8 percent from 97.1 percent in the previous quarter because of the worldwide recession. However, it managed to attain positive reversion of the rental during the financial year’s first half.
The company also achieved an increase of 11.7 percent on-year to S$81.1 million in its net property income.
Market watchers stated that the rental outlook for the industrial sector remains challenging. A turnaround, according to some industry players, may only start in 3 to 6 months.
They also said that the industrial rental sector usually lags behind by around 18 months before companies expand and transfer to new spaces because they have to raise their output first.
CEO and Executive Director Tan Ser Ping of Ascendas Real Estate Investment Trust stated, "Occupancy rate may not go up given the current sort of market conditions. In fact, it may moderate marginally in the next six months.”
"But the net property income for the portfolio, we would expect it to be able to sustain, because the marginal decline expected in the occupancy rate is compensated or mitigated by the higher rental rate upon renewal”.
"We continue to be able to let out some of the vacated space and also more importantly, we have two new properties coming onstream – contributing to the portfolio income – and another big one coming onstream in the fourth quarter of the financial year", added Mr. Tan.
This year, the company was able to complete two development projects amounting to S$123 million, which is around 7.3 percent below the estimated cost of development.
The projects include the logistics facility located at the Airport Logistics Park of Singapore and the Phase 2 at Plaza 8 Changi Business Park. It is expected that these two properties will contribute to the revenue in the third quarter of 2009.
The other development of A-REIT that is in progress is the building situated at Kim Chuan Road. The project, which will be rented by SingTel, is expected to be all set by 2010.