Ascott Residence Trust (ART) posted a distributable income of S$61.7 million in 2H 2020 and S$94.2 million in FY 2020 amidst the COVID-19 pandemic. The distributable income for 2H 2020 is a 32% decline compared to 2H 2019. To mitigate the impact of COVID-19, replace loss income from divested assets and to share past divestment gains with Stapled Securityholders, a one-off partial divestment gain of S$40.0 million will be distributed to Stapled Securityholders. ART also released the S$5.0 million of distributable income which was retained in 1H 2020. Distribution per Stapled Security (DPS) for 2H 2020 is 1.99 cents, a 52% decrease compared to 4.18 cents in 2H 2019.
Mr Bob Tan, Chairman of Ascott Residence Trust Management Limited (ARTML) and Ascott Business Trust Management Pte. Ltd. (the Managers of ART) said: “ART’s properties that cater predominantly to the long-stay customer segment, our geographically diversified presence, and mix of stable and growth income streams have helped to cushion the impact of COVID-19 on ART’s financial performance. About two-thirds of ART’s gross profit was from master leases and management contracts with minimum guaranteed income which provide us with more stability. Given the resurgence and uncertainty around new strains of the coronavirus, global economic recovery remains fragile. Nonetheless, ART is well-capitalised and continues to build on our financial strength.”
Mr Tan added: “As part of our capital recycling strategy, we have divested two properties at the end of last year with two more to be completed in 1Q 2021, all at a premium to their book values. Proceeds from the sale of these properties will be deployed into higher yielding assets. The expansion of our investment mandate to include student accommodation assets and acquisition of our first student accommodation asset will bolster our resilience and increase our stable income stream. We will look for opportunities to invest in longer stay lodging assets with longer weighted average lease expiry (WALE). 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: “We continue to actively reconstitute and enhance ART’s portfolio as we remain disciplined in managing our capital and costs. The student accommodation asset we have acquired has strong domestic demand with high average occupancy rate of 95% despite COVID-19 and will add an approximate 4.4% to DPS for FY 2020 on a pro forma basis.”
Ms Beh added: “Despite the near-term headwinds, there is significant pent-up demand for travel. The domestic, leisure and free independent segments are expected to continue to lead the recovery. As vaccinations become widely available, travel is expected to resume. In the meantime, we have proactively sourced for alternative businesses such as guests looking for spaces to work-from-home to supplement our long-stay business, and increased our digitalisation initiatives. We have also stepped up our sustainability efforts. ART was the first hospitality trust in Singapore to secure a green loan and we aim to green ART’s global portfolio by 2030. This will prepare us for the upturn with a future-ready portfolio as we do our part as a responsible hospitality trust.”
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