Ascendas REIT continues their ascent to stability

A purchase fully paid in cash aggregates A-REIT's leverage to be around 36% after factoring in revaluation gains.

The company's operating performance is likely to stay resilient in the coming quarters, with A-REIT's Singapore properties achieving positive rental reversions of 2.6-12.5% YTD upon renewal of existing leases.

Here's more from the OCBC Investment Research:

Ascendas REIT (A-REIT) reported that the acquisition of the Cintech properties was completed on 29 Mar at a total consideration cost of S$185.5m. No consideration units were issued as its sponsor Ascendas Land had indicated that it did not wish to receive any equity consideration.

As a result, the purchase consideration was fully paid in cash by way of internal resources and drawdown of debt. We estimate A-REIT’s aggregate leverage to be around 36% after factoring in revaluation gains for its portfolio properties. We also note that A-REIT’s Singapore properties continued to achieve positive rental reversions of 2.6-12.5% YTD upon renewal of its existing leases.

This is in line with our view that A-REIT’s operating performance is likely to stay resilient in the coming quarters. We now factor in the acquisition of Cintech properties and portfolio revaluation into our forecasts. We also re-jig our DDM model assumptions (cost of equity at 7.5%, up from 7.0% previously) and roll over our valuation to FY13. This raises our fair value marginally from S$2.30 to S$2.31. Maintain BUY.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia