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MANAGER’S REPORT
A-REIT’s Portfolio Occupancy
Rate Vs Industry
100%
80%
60%
40%
A-REIT
Occupany rate (%)
URA
89.7% 93.3% 96.9% 98.5%
88.3% 88.3% 90.0%
80.8%
Multi-tenanted
properties
Net lettable
area (sqm)
Vacant
space (sqm)
As at 31 March 10
Increase / Increase /
(decrease) (decrease) in
in renewal new take up
rates (1) rates (2)
Business & Science 252,495 38,388 10.3% 13.8%
Parks
Hi-Tech Industrial 203,634 22,309 7.6% 1.0%
Light Industrial 205,259 14,865 (2.6)% 9.0%
Logistics &
Distribution Centres
317,516 10,677 2.7% (4.1)%
Notes:
(1)
FY09/10 renewal rental rates versus previously contracted rates
(2)
Rental rates for new take up (including expansion by existing tenants) in 4Q FY09/10 versus similar rates in 3Q
FY09/10
20%
0
Business &
Science Parks
Hi-Tech
Industrial
Light
Industrial
Logistics &
Distribution
Centre
portfolio occupancy still exceeded
the Urban Redevelopment
Authority’s (“URA”) island-wide
occupancy rates by between 5.0%
and 8.9%.
A-REIT leased and renewed a total
of 274,316 sqm of space within
the portfolio in FY09/10, of which,
186,637 sqm are renewal of leases,
demonstrating the effectiveness of
A-REIT’s active lease management
and its positive relations with
customers. New demand was 87,679
sqm which showed a 23.4% y-o-y
growth. Customer retention rate
stands at a healthy 74.6% signifying a
large majority of customers renewed
their tenancy with A-REIT upon
expiration of their existing leases.
Organic Growth: Rent Reversions
Renewal rates and new take-up rental
rates continued to remain strong in
the Business & Science Park property
sector with growth of 10.3% in renewal
rental rate over existing contract
rates and a 13.8% q-o-q growth in
the rental rates for new leases at the
end of the financial year. In the Hi-
Tech Industrial property sector, the
corresponding figures were 7.6% and
1.0% respectively. However, Light
Industrial properties registered a
decline in renewal rates while Logistics
& Distribution properties noted a
modest increase in renewal rates.
Outlook for FY10/11
Relative stable rental expected on
renewal
31.0% of total lease (by total gross
lease revenue) in the portfolio will
be due for renewal in the current
and next financial year. As of 31
March 2010, about 280,000 sqm
accounting for about 15.3% of the
portfolio gross revenue are due for
renewal in FY10/11. The current
passing rent for most of these leases
is below the prevailing market rental
rate. Though market rental rate has
been on the decline since the
outbreak of the economic crisis, the
Manager has noted a moderation in
the rate of decline. We continue to
expect some potential for positive
rental reversion, however, the extent
of such reversion will largely depend
on the strength and sustainability of
the recovery of the economy.
Potential Investment
The Manager will continue with its
emphasis to achieve better returns
per investment dollar through the
creation of assets by utilizing our
development capability and capacity
by targeting high quality prospective
tenants in more promising and
stable industries. This will allow the
30 Ascendas real estate investment trust