Page 8 - ar2012

Dear Unitholders,
a-iTrust has made good progress in the past year amidst the
global economic instability. The European crisis, triggered
by the near default of Greek loans, dampened general
investment sentiments across the world. For India, it grappled
with persistent infation and slower economic growth. The
ensuing credit tightening measures introduced by the Reserve
Bank of India for most part of the year to tame infation kept
domestic fnancing costs high. Instead of relying on borrowing
in India, a-iTrust secured Indian Rupee denominated loans in
Singapore at signifcantly lower rates. Despite these short-
term challenges, we remain positive about India’s long-term
growth prospects. India has the third largest economy in the
world (by purchasing parity) and is forecast to achieve a still
strong GDP growth of close to 7% in 20126 . Key sectors such
as information technology and business process off-shoring
continued to chalk up impressive growth. On the ground,
we witnessed healthy leasing demand from multinational
companies as they took advantage of the comparatively low
operating costs and deep pool of talented workforce in India.
Milestones
We are pleased by the progress that a-iTrust has made in the
Financial Year ended 31st March 2012 (“FY2011/12”).
In February 2012, we acquired two properties in Hyderabad
and renamed them aVance Business Hub (“aVance”). This
transaction marked the frst major acquisition since our listing
in 2007. Both buildings enjoyed full occupancy as at 31st
March 2012 and have a total foor area of 427,700 square feet.
We paid S$44.8 million for the assets and the acquisition was
fully funded by bank borrowings.
On the development front, we completed the construction
of Voyager, a 537,300 square feet multi-tenanted building in
June 2011. Besides Voyager, two other buildings, Zenith and
Park Square, were completed in December 2010. These three
properties added 1.7 million square feet of leasable area to our
portfolio. In the last twelve months, we successfully ramped
up the weighted average occupancy of the new buildings from
43%7 a year ago to 88% as at 31st March 2012.
Financial performance
a-iTrust delivered strong results in Indian Rupee terms.
FY2011/12 total property income grew 17% over the
previous year, boosted by higher contributions from the
new buildings. At the net property income level, the year-
on-year growth moderated to 16% as expenses from the
new developments were incurred almost in full while rental
revenues were recognised progressively. As at the fourth
quarter of FY2011/12, the new buildings collectively have
crossed the breakeven income level. DPU, increased 2% in
Indian Rupee terms to INR 230.2 from a year ago. During the
course of FY2011/12, the Singapore Dollar appreciated by
12% against the Indian Rupee8, impacting a-iTrust’s fnancial
performance in Singapore Dollar terms. As a result, FY2011/12
total property income and net property income increased 5%
and 3% respectively over the previous year in Singapore
dollar terms. DPU however, fell 9% over the same period to
6.0 Singapore cents, largely due to the unfavourable currency
movement and higher tax expenses.
We are cognizant of, and sought to moderate the impact of
foreign exchange fuctuations by hedging our income up to
six months ahead of repatriation date. While a-iTrust’s current
hedging strategy reduces the volatilities of currency fuctuations,
it cannot change the overall trend of foreign exchange
movements. You can fnd more details on our hedging strategy
in the risk management section of this annual report.
Operational performance
a-iTrust continued to perform strongly across key operational
metrics in FY2011/12. Portfolio occupancy levels (excluding
Note to Unitholders
In the last twelve months, we successfully ramped up
the weighted average occupancy of the new buildings from
43%7 a year ago to 88% as at 31st March 2012.
6Source: IMF World Economic Outlook, April 2012.
7Represents the weighted average occupancy of Park Square and Zenith (Voyager was under construction as at 31st March 2011).
8Average exchange rate for FY2011/12 was S$1 : INR 38.41, and for FY2010/11 S$1 : INR 34.41.
6 POSITIONED FOR GROWTH