ESR-REIT (SGX:9A4U
) has reported distributable income of $44.8 million, 1.4% higher y-o-y in 1QFY2026, ended March 31. The figure is partially offset by absence of $1.9 million in other gains distributable income recorded in 1QFY2025.
Gross revenue and net property income (NPI) declined by 0.4% and 2.3% y-o-y to $110.1 million and $80.6 million respectively, mainly due to divestment of 79 Tuas South Street 5, 1 Third Lok Yang Road, 4 Fourth Lok Yang Road and the hotel at Changi Business Park.
However, on a same-store basis, gross revenue grew by 1.4% y-o-y to $109.9 million due to positive rental reversion and higher rental rates from new leases. NPI, on the same basis, was down marginally 0.1% y-o-y to $80.6 million due to higher utilities and property tax.
For 1QFY2026, ESR-REIT’s portfolio rental reversion stood at 9.2%, driven by logistics and high-specs industrial space. Weighted average lease expiry stood at 4.7 years and 18.2% of the leases will be up for renewal this year.
Overall portfolio occupancy rate by NLA was at 91.3% as at March 31, compared to 91.6% a year ago.
In terms of capital management, ESR-REIT’s gearing as at March 31 was at 44.3%. Pro-forma gearing will be at 39.5% post divestment completion of eight non-core Singapore assets totalling $338.1 million and the hotel at Changi Business Park.
See also: Elite UK REIT reports 9.8% y-o-y rise in distributable income for 1QFY2026
All in cost of debt was at 3.34%, improved from 3.65% a year ago. 66.1% of ESR-REIT’s are on fixed rate with exposure fixed for 1.7 years.
In terms of outlook, ESR-REIT’s manager expects higher warehouse supply between FY2026 and FY2027 and ongoing global supply chain cost pressures may weigh on demand in the near term.
“As such, rental reversions are expected to moderate to single digit positive rental reversions over the next two years with stable occupancies,” says the Manager.
As at 9.47am, Units in ESR-REIT are unchanged at $2.47.
