Ascott Residence Trust (ART) has increased its distribution per Stapled Security (DPS) for FY 2021 by 43% to 4.32 cents compared to FY 2020.
ART’s distribution income also grew 46% to S$137.3 million compared to FY 2020. The distribution income for FY 2021 included a one-off distribution of divestment gain of S$45.0 million to share divestment gains with Stapled Securityholders, to replace income loss from divested assets and mitigate the impact of COVID-19. Excluding the divestment gains distributed in FY 2021 and FY 2020, ART’s DPS rose 85% year-on-year due to improved operating performance and ART’s active portfolio management to enhance income stability.
ART’s revenue per available unit (REVPAU) continued its upward trajectory, rising over six consecutive quarters since 2Q 2020. With the pace of reopening picking up, its REVPAU for 4Q 2021 registered the strongest quarter-on-quarter increase at 24% to S$87. ART’s REVPAU jumped 61% to S$79 for 2H 2021 compared to 2H 2020. Its long-stay properties continued to provide income stability, while the easing of travel restrictions and increased global economic activities led to a hike in demand from both corporate and leisure guests. ART’s key markets, the United States of America (USA), United Kingdom and Australia registered the strongest growth.
Mr Bob Tan, Chairman of Ascott Residence Trust Management Limited (ARTML) and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “Through our active portfolio management, we have enhanced ART’s income stability by building its longer-stay assets and further diversifying its portfolio. In the past year, ART invested S$780 million in 11 yield-accretive rental housing and student accommodation assets at an average EBITDA yield of about 5%. We have successfully replaced the distribution income from our divested assets at higher yields. In FY 2020 and 2021, ART divested six assets at an average exit yield of around 2% and received about S$580 million in proceeds. Our longer-stay assets currently make up about 16% of our total portfolio value. We will raise the asset allocation target in these longer-stay assets from 15-20% in the medium term to 25-30%, further strengthening the resilience of ART’s portfolio. We remain committed to delivering sustainable, long-term value to our Stapled Securityholders.”
Ms Beh Siew Kim, Chief Executive Officer of ARTML and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “In 2021, ART was also recognised for our sustainability and corporate governance efforts, placing first in reputable indices and awards globally and in the region. We continue to seek more yield-accretive investments while remaining committed to sustainability and taking a disciplined approach in managing our capital and costs.”
“Economic growth is expected to be modest in the near term, given the mobility restrictions in light of the Omicron variant and tightening of monetary policies to curb inflationary pressures. ART’s presence in large domestic markets will allow us to continue capturing the strong local demand in the interim. Travel is recovering in many markets, such as Europe and the Americas, as vaccination rates increase. The coordinated lifting of travel restrictions and governments’ commitment to the reopening of international borders, could further help to restore confidence in travel and accelerate recovery in 2022. With ART’s geographically diversified portfolio, we are well-positioned to capture demand as international travel gradually returns,” added Ms Beh.