Ascott Residence Trust

Ascott Residence Trust: 1Q13 results missed expectations. Revenue at $69.2m, -3% yoy, mainly due to divestment of Somerset Grand Cairnhill Spore and Somerset Gordon Heights Melbourne, and lower contribution from existing properties, mainly in Singapore and Japan (partially due to weaker yen). REVPAU at $124, -10% yoy. Gross profit at $33.8, -9% yoy, was down mainly due to lower revenue, higher staff costs and depreciation. Unitholders’ distribution at $27.6m, +14% yoy, boosted by a realized exchange gain of $8.1m from repayment of foreign currency bank loans. Excluding this one off, distribution would have fallen by 19% yoy. DPU at 2.25 cts, +5%, due to placement of 114.9m new units at $1.305/unit. Mgt will continue to actively look for accretive acquisitions in key gateway cities in Asia as well as London, Paris and key cities in Germany. Expects FY13 to remain profitable. The Reit trades at 1.1x P/B, 6.2% annualized 1Q13 yield.