Ascott Residence Trust (Ascott REIT) said the unit-holders’ distribution in the third-quarter dropped 25 percent to $11.8 million from $15.9 million in the previous year, as demands for serviced residences in China and Singapore weakened.
The distribution per unit (DPU) was 1.92 cents in the third quarter, which ended on the 30th of September 2009, down by 26 percent from 2.61 cents at the same period last year.
“The lower performance as compared to Q3 2008 was a result of the global economic slowdown, increased competition from new supply in Beijing and Shanghai, and the strong performance in August 2008 due to the Beijing Olympics,” said Ascott REIT in a statement.
The revenue per available unit (RevPAU) also dropped 24 percent year-on-year to $124 in the third quarter this year. The decline of the RevPAU was due to the regression of both average daily rates and the occupancies of the group’s serviced residences. Revenue for the third quarter of 2009 also dropped 17 percent to $44.4 million.
However, Ascott REIT’s management said the challenges created by the global financial crisis to the hospitality industry somehow lessened in the third quarter of 2009 compared to the previous quarter.
“Our Q3 operating performance has shown further signs of stabilisation in hospitality demand,” said Ascott chairman, Lim Jit Poh. “While we remain cautious over the pace and extent of recovery, we are confident of the longer-term growth in the markets in which we operate.”
Sequentially, DPU and distribution of unit-holders were 7 percent higher as compared to Q2’s 1.79 cents and $11 million respectively.
Ascott REIT’s operating performance also increased in Q3 over the previous quarter, led by RevPAU growth in China, Singapore and Japan of 7 percent, 15 percent and 24 percent respectively.
In anticipation of the expected increase in demand as the economic condition recovers, Ascott REIT accelerated its asset improvement for selected properties. The company will also continue to look for yield-accretive acquisitions.