Ascendas India Trust posts 1H FY2021 DPU of 4.20 Singapore Cents
Ascendas India Trust 1H FY2021 Results.
- (1888PressRelease) July 29, 2021 - Ascendas Property Fund Trustee Pte. Ltd., the Trustee-Manager of Ascendas India Trust (“a-iTrust” or the “Trust”), has announced today a net property income of S$77.3 million for the period from 1 January to 30 June 2021 (“1H FY2021”), an increase of 5% compared to the same period last year. 1H FY2021 DPU was lower by 9% year-on-year in Singapore Dollars terms at 4.20 S₵ mainly on account of a one-off reversal of dividend distribution tax (“DDT”) provision made in the last financial year.
Mr. Sanjeev Dasgupta, Chief Executive Officer said, “The second wave of COVID-19 in India presented a challenge and an opportunity to strengthen relationships with the companies operating within our business parks. We have been actively engaged in providing support to maintain a safe environment and keep our parks operational throughout the period. We are also working closely with local government authorities to provide healthcare support. This included setting up of a temporary COVID Care Centre at International Tech Park Bangalore and initiating vaccination drives at our business parks.
The leasing environment remains challenging. Our committed portfolio occupancy has decreased from 94% as at 31 December 2020 to 90% as at 30 June 2021. Despite the subdued leasing environment, we have leased/renewed 1.8 million square feet in the first half of 2021. Our office rental collections remain healthy at 97% [4].
We have added new economy asset classes such as data centres and industrial into our committed growth pipeline to improve portfolio resilience. We will continue to seize accretive investment opportunities to strengthen portfolio diversification to deliver long-term sustainable returns to our Unitholders.”
Financial performance (1H FY2021 vs 1H FY2020)
In Indian Rupee terms, total property income of ₹5.2 billion for 1H FY2021 reflects growth of 1% mainly due to income from Endeavour building in Bangalore which was completed in November 2020 and income from aVance 6 building in Hyderabad which was acquired in March 2021. This was partially offset by lower portfolio occupancy and lower utilities and carpark income as most tenants continue to work from home due to COVID-19 considerations. Total property expenses decreased by 26% to ₹1.0 billion largely from a reversal of expected credit loss and reduced operations, maintenance and utilities expenses. These factors resulted in net property income increasing by 10% to ₹4.3 billion.
Despite the increase in net property income, 1H FY2021 DPU decreased to 4.20 S₵ largely due to the reversal of DDT provision in 1H FY2020. The SGD appreciation against the INR of about 5% further contributed to the decrease in 1H FY2021 DPU in Singapore Dollar terms.
Portfolio performance
As at 30 June 2021, a-iTrust’s committed portfolio occupancy remained resilient at 90% [5] (31 March 2021: 91%[5]; 30 June 2020: 98%). Acquisition of the fully leased aVance 6 in HITEC City, Hyderabad in March 2021 added Amazon[6] to the Trust’s well-diversified tenant base.
Park Square Mall reopened on 5 July 2021, after mandatory closure from 22 April 2021, in line with the state government’s COVID-19 restriction orders.
Prudent capital management
a-iTrust remains in a strong financial position to fulfil all its financial and operational obligations. As at 30 June 2021, the Trust has a healthy gearing ratio of 33%, ample total debt headroom of S$980 million[7] and cash of S$178 million. Out of a-iTrust’s total borrowings, 77% were effectively on a fixed-interest rate basis and 65% were hedged into Indian Rupees.
Growth initiatives
In March 2021, a-iTrust entered into a forward purchase agreement to finance the development and proposed acquisition of its maiden industrial facility located in Mahindra World City, Chennai. Phase 1 of this development, a 0.42 million square feet industrial asset, is fully pre-leased to a subsidiary of Pegatron Corporation, a leading Taiwanese contract electronics manufacturer. Construction is expected to complete by September 2021.
a-iTrust will further expand its footprint in Bangalore as it entered into a forward purchase agreement in March 2021 to fund the development and subsequent acquisition of 1.65 million square feet of an IT park in Hebbal, a new micro-market for the Trust.
a-iTrust is closing the acquisition of a 6.6-acre greenfield site in Airoli, Navi Mumbai for its first fully-fitted data centre campus in India, which will be developed in phases with a total sanctioned load of 90 MW. As announced on 5 July 2021, an estimated INR 12 billion (S$216.6 million[8]) will be invested for the development of the first data centre building with a potential built-up area of 0.33 million square feet, to be operational by the second quarter of 2024.
Construction activities for existing projects, including those in the Trust’s committed forward purchase pipeline, have improved since June 2021 as COVID-19 restrictions ease. With the current committed growth pipeline, a-iTrust plans to expand from its existing 14.4 million square feet of completed portfolio area to 25.2 million square feet of properties comprising business and logistics parks, industrial facility and data centre over the next few years.
Notes:
[1] Distribution per unit (income to be distributed) in Singapore Dollar terms.
[2] Average exchange rates used in the income statement.
[3] The Singapore Dollar appreciated by 4.8% against the Indian Rupee.
[4] Figure for 2Q 2021 billings collection status as at 15 July 2021. 99% of April, 99% of May and 95% of June billings were collected.
[5] Excludes Mariner building in International Tech Park Hyderabad which has been vacated for redevelopment and includes the newly acquired aVance 6 building in HITEC City, Hyderabad.
[6] Amazon Development Center (India) Private Limited.
[7] Based on the revised regulatory gearing limit of 50%.
[8] Exchange rate of SGD 1 to INR 55.0.
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