Ascendas REIT Continues To Grow Its Business Park Segment



Key Highlights:

  • Ascendas REIT (SGX: A17U)'s 2Q19 DPU grew 2.3%

  • The annualised yield and price to book ratio are 5% and 1.46 respectively


1. Dividends


Net property income was up 12% to $177.9m. The was mainly due to the reclassification of land rent as finance cost based one the new accounting standard. This has bumped up the net property income but no effect on DPU.


The annualised yield is 5%. As the biggest industrial REIT in Singapore, Ascendas REIT has been delivering very consistent results to the unit holders. Both the DPU and price has been in the uptrend over the years.


Source: reitscompass's REITs Insider ratings



2. Portfolio


Portfolio occupancy dropped to 91%. This was mainly dragged by the weaker occupancy at Logis Hub@Clementi, 31 International Business Park and Plaza 8. The portfolio leverage is currently at the healthy side of 36.2%. The interest cost is at 3%, with 76.8% of the loans are on fixed rates.


It is currently trading at a price to book ratio of 1.46.



3. Growth Catalyst


Moving forward, the market sentiment of industrial space in Singapore is relatively bearish as compared to other segments. The rental rates are expected to be depressed. Good news is Ascendas REIT has built a diversified portfolio across Singapore, Australia and UK. Its Australia portfolio is expected to remain as the key growth driver.


On 1st Nov, the REIT has announced that it is looking to raise S$1.29b from existing investors to partially fund the acquisition of 30 business parks from its parent, Capitaland. The properties will spread across US (28 properties) and Singapore (2 properties).



Summary


Ascendas REIT is one of the biggest blue chip REIT in Singapore. Its portfolio is very well diversified. If you are considering to get a industrial REIT, Ascendas REIT could be a conservative play with the strong track record.



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