Ascendas REIT reallocates assets to Australia

It divested assets in China while expanding presence down under.

Ascendas real estate investment trust is making a strategic move in divesting its assets to China and increasing its exposure in Australia.

According to RHB, Ascendas divested all its three industrial properties in China.

"The properties were divested well above book value and is positive amid current challenges, especially in Tier-2 and Tier-3 cities, in China’s industrial property segment," RHB said.

On the other hand, it has decided to increase its presence in Australia's industrial property market, from which 13% of its portfolio is located.

"We think this is a good opportunistic move by the REIT as Australian assets provides stability, with their triple net lease structure and a built-in annual rental escalation of 3-4% pa. The high cap rates (~7%) of Australian industrial properties also allows it favourable yield accretive acquisitions in future," the brokerage firm noted.

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