Ascendas REIT (SGX: A17U) Delivered Strong Financial Results Despite Covid-19

Ascendas REIT (SGX: A17U) has recently announced its first half 2020 financial results. It is currently trading at 4.2% yield based on the last traded share price on 24 July.

Key Highlights:

  • Distribution per unit (DPU) and Dividend Yield (4.2%)

  • Price to book ratio (1.56)

  • Gearing (36.1%)

  • Interest coverage ratio (4.2x)

  • Portfolio occupancy rate (91.5%)

  • Positive rental reversion (5.4%)

  • Growth catalyst

Background of Ascendas REIT

Ascendas REIT was the second REIT listed on Singapore Stock Exchange in 2002. It is the biggest REIT with a focus on managing industrial properties. The REIT owns and manages a portfolio of industrial properties in Singapore, Australia, the United Kingdom and the United States.

Ascendas REIT is managed by Ascendas Funds Management Limited, which is owned by Capitaland Limited (SGX: C31). The REIT is listed on several indices, which include the FTSE Straits Times Index, the Morgan Stanley Capital International, Inc (MSCI) Index, the European Public Real Estate Association/National Association of Real Estate Investment Trusts (EPRA/NAREIT) Global Real Estate Index and Global Property Research (GPR) Asia 250.

1. Distribution per unit and dividend yield

In its 1H 2020 financial results, Ascendas REIT delivered a very healthy first half 2020 operational performance. Its distributable income was up 3.7% year-on-year. However, the DPU was down by 10.8%, this was mainly due to the enlarged unit base from the right issue exercise in December last year.

Based on its latest price, the REIT is currently trading at about 4.2% dividend yield. Historically, the REIT has been paying very consistent DPU, with steady growth over the years. However, its current 4.2% yield is at the low side as compared to its average yield of 6.5% over the past 10 years.