Ascott Residence Trust’s (ART) results were within expectations. 4Q17 revenue increased 6% to S$134.5m. This increase of S$7.8m was mainly contributed by S$11.2m of additional revenue of S$11.2m from the 2017 acquisitions, partially offset by a S$3.3m loss in revenue from the divestments in Japan and China.

Gross profit increased a corresponding 6% to S$61.8m. DPU was flat YoY at 2.04 S cents for the quarter.

Distributions to unitholders this quarter included a one-off partial distribution of the gains from the divestment of Citadines Biyun Shanghai and Citadines Gaoxin Xi’an of S$6.5m.

FY17 DPU came up to 7.09 S cents. RevPAU for the REIT’s Singapore serviced residences clocked a 6% increase to S$185 due to higher corporate demand. As a whole, ART’s portfolio RevPAU for 4Q17 grew 5% YoY.

We continue to like ART’s robust geographical diversification and active portfolio rebalancing. Pending further details from the briefing, we place our Hold rating and fair value of S$1.11 under review.

Source: OCBC Research - 26 Jan 2018