Elite Commercial REIT - DBS Research 2023-08-11: Impacted By Rising Cost Of Debt

• Elite Commercial REIT (SGX:MXNU)'s 1H23 revenue grew 3.4% y-o-y to GBP19.1m in 1H23 from GBP18.5m in 1H22, slightly ahead of our estimate. Higher revenue was derived from rent escalations of ~13.1% for 136 assets from April 2023, partly offset by eight assets vacating from April 2023.
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• Elite Commercial REIT's 1H23 distributable income declined 31.2% y-o-y to GBP8.4m while DPU fell 31.9% y-o-y to 1.74 pence. This was due to increased interest cost of borrowings, an enlarged equity base y-o-y, as well as a change in the payout ratio to 90% from 100%.

Elite Commercial REIT's performance metrics

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• Gearing ratio decreased to 46.0% as at 30 June 2023 from 46.6% as at 31 December 2022, as a portion of the recycled gross proceeds from the dilapidation settlements and divestment of two assets was used for the repayment of loans.
• High portfolio occupancy of 92.1% as at 30 June 2023, with 99.9% of rent for 3Q23 paid in advance and within seven days of the due date.
• Long WALE at 4.5 years as at 30 June 2023.

Our thoughts on Elite Commercial REIT

Portfolio update.

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Tabitha FOO DBS Group Research | Derek TAN DBS Research | Dale LAI DBS Research | https://www.dbs.com/insightsdirect/ 2023-08-11 SGinvestors.io

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