Elite Commercial Reit posts DPU of 1.95 pence, 1% above IPO forecast

ELITE Commercial Reit on Thursday posted a distribution per unit (DPU) of 1.95 pence for the period from Feb 6 to June 30, 2020, 1 per cent higher than its initial public offering (IPO) forecast of 1.93 pence. 

The real estate investment trust (Reit) was listed on the Singapore bourse on Feb 6 this year, opening at 70.5 pence, 3.7 per cent higher than its IPO price of 68 pence.

Revenue for the period came in at £9.32 million (S$16.4 million), 0.3 per cent higher than its forecast of £9.28 million. Net property income stood at £9.1 million, 0.2 per cent above its IPO forecast of about £9 million. 

Distributable income for the period was £6.5 million, 1.3 per cent above its forecast of £6.4 million. 

Elite Commercial Reit's distribution policy is to distribute all of its annual distributable income from its listing date till Dec 31, 2021. Distribution for the current reporting period is expected to be paid on Sept 11, following books closure on Aug 3. 

Despite the challenging macroeconomic backdrop arising from the Covid-19 pandemic, the Reit continues to enjoy "stable and recession-resistant cash flows", underpinned by its counter-cyclical tenant - the Department for Work and Pensions (DWP) - which is the UK government's largest public service department, the manager said. 

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As at June 30, the Reit's portfolio is 100 per cent occupied. In terms of rent collection, the Reit received in advance 99.8 per cent of the three-months rent for the period spanning July to September 2020, within seven days of the due date, the manager said. 

Elite Commercial Reit expects to provide a "stable income" to investors as over 99 per cent of rental income is derived from full repairing and insuring leases from the UK government.

Shaldine Wang, chief executive officer of the manager said: "We are pleased with the solid financial performance of our portfolio, amidst the challenging backdrop of the Covid-19 pandemic. This validates Elite Commercial Reit's investment proposition - our portfolio provides attractive and recession-proof cash flows backed by a uniquely counter-cyclical occupier, the DWP.

"In fact, there was minimal business disruption as Jobcentre Plus locations remained open to process and disburse benefits to claimants during the recent lockdown in the UK, even as medical assessments, interviews or other face-to-face appointments were discouraged."

Looking ahead, the manager said it will proactively look at opportunities for growth via yield-accretive asset acquisitions. This comes as it has been granted right of first refusal by one of its sponsors to acquire properties located in the UK, most of which have been leased long-term by various ministries of the UK government. 

Units in Elite Commercial Reit closed at 69 pence on Wednesday, down 0.7 per cent or 0.5 pence. There were no trades for the day as at 9.15am.