Ascott REIT's net profit up 7% to $63.1m in Q2

It was pushed by acquisitions in Singapore and Germany in 2017.

Ascott Residence Trust’s (Ascott REIT) revenue rose 6% YoY to $130.5m in Q2 2018 fueled by 2017 acquisitions, an announcement revealed. Its gross profit grew 7% to $63.1m thanks to higher revenue.

In 2017, the firm acquired assets including Ascott Orchard Singapore, Citadines City Centre Frankfurt and Citadines Michel Hamburg that provided income stability through master leases. Meanwhile, DoubleTree by Hilton Hotel New York – Times Square South continues to reap strong demand.

“We will continue to seek accretive acquisitions to sustain growth, whilst maintaining a balanced portfolio that delivers stable income through master leases and management contracts with minimum guaranteed income, as well as growth income through management contracts,” Ascott Residence Trust Management Limited’s (ARTML) chairman Bob Tan said.

Also read: Ascott REIT's Q1 results hit by weak corporate demand in Singapore

In addition, the soaring demand and better operating performance of its portfolios in other markets such as Belgium, China, and the United Kingdom fueled the 6% advance in revenue per available unit (RevPAU) to $155.

“The performance of our Japan properties remained stable amidst new supply in the market,” ARTML CEO Beh Siew Kim said.

She added that the China properties fared well amidst lowered total revenue and gross profits through the divestment of two lower yielding properties in Shanghai and Xian.

For the second quarter, the firm’s unitholders’ distribution was at $39.8 million whilst distribution per unit (DPU) remained at $0.184 YoY.

“DPU for 2Q 2018 would have increased 13% if the one-off item for 2Q 2017 was excluded,” the firm explained. “The one-off item was a realised exchange gain of S$11.9 million arising from the repayment of foreign currency bank loans with the proceeds from Ascott Reit’s rights issue.”

Beh revealed that the firm some of its properties are under enhancement to increase appeal uplift their rates. Citadines Arnulfpark Munich and Sheraton Tribeca New York Hotel have recently completed their refurbishment.

Meanwhile, enhancement for Ascott Makati, Citadines Trocadéro Paris, Somerset Grand Hanoi, Somerset Grand Citra Jakarta are still ongoing.

“Taking a disciplined and prudent approach towards capital management, we will continue to actively monitor the market and employ appropriate capital financing and hedging strategies to manage interest rates and foreign currency exposure,” Beh noted.