Ascendas REIT (A-REIT) achieved a 4.4% YoY gain in 2QFY13 DPU to 3.53 S cents, notwithstanding a 7.5% increase in units. For 1HFY13, DPU amounted to 7.06 S cents, up 7.3% YoY. This is slightly ahead of our expectations, as the half-year DPU already formed 51.0% of our FY13 forecast. Going forward, management revealed that positive reversions may possibly continue into FY13-14, as the passing rents are generally below the current market rates for the area due for renewal. While A-REIT expects the acquisition activity to remain ‘quiet’, it can focus on the consolidation of its properties. To this extent, A-REIT announced another two asset enhancement initiatives (AEIs) for 31 Ubi Road 1 and 1 Changi Business Park Ave 1 to upgrade the building specifications and enhance their marketability. We now incorporate the results and AEIs into our assumptions. This lifts our fair value from S$2.28 to S$2.43. However, as A-REIT appears fairly priced at current level, we maintain our HOLD rating.
Slightly above expectations
Ascendas REIT (A-REIT) released its 2QFY13 results yesterday. NPI grew by 13.6% YoY to S$102.9m, while distributable amount rose by 12.2% YoY to S$79.1m. The strong performance was mainly due to the completion of development projects and new acquisitions. DPU for the quarter increased 4.4% YoY to 3.53 S cents, notwithstanding a 7.5% increase in units (following private placement in May). For 1HFY13, DPU amounted to 7.06 S cents, up 7.3% YoY. This is slightly ahead of our expectations, as the half-year DPU already formed 51.0% of our FY13 forecast (50.4% of consensus).
Continues to prove its portfolio resilience
During the quarter, A-REIT renewed and signed new leases totalling 73,874 sqm of industrial space, equivalent to 6.1% of its multi-tenanted buildings’ NLA. While portfolio occupancy eased by a marginal 0.3ppt QoQ to 94.3%, it was mainly due to additional space (20,865 sqm) following the completion of phase 2 AEI at 10 Toh Guan Road in Aug. Excluding that, we note that same-store portfolio occupancy actually improved to 96.6% from 96.4% a quarter ago. In addition, A-REIT shared that positive rental reversions averaging 12.8% were still achieved across all its property types. This is stronger than the 11.6% average seen in 1Q. As the passing rents are generally below the current market rates for the area due for renewal in FY13-14, management guided that positive reversions may possibly continue.
Maintain HOLD on valuation grounds
Going forward, A-REIT expects the acquisition activity to remain ‘quiet’ as it sees limited attractive properties left in the market. Hence, it will focus on the consolidation of its properties. To this extent, A-REIT announced another two asset enhancement initiatives (AEIs) for 31 Ubi Road 1 and 1 Changi Business Park Ave 1 to upgrade the building specifications and enhance their marketability. We now incorporate the results and AEIs into our assumptions. This lifts our fair value from S$2.28 to S$2.43. However, as A-REIT appears fairly priced at current level, we maintain our HOLD rating.
Ascendas REIT (A-REIT) released its 2QFY13 results yesterday. NPI grew by 13.6% YoY to S$102.9m, while distributable amount rose by 12.2% YoY to S$79.1m. The strong performance was mainly due to the completion of development projects and new acquisitions. DPU for the quarter increased 4.4% YoY to 3.53 S cents, notwithstanding a 7.5% increase in units (following private placement in May). For 1HFY13, DPU amounted to 7.06 S cents, up 7.3% YoY. This is slightly ahead of our expectations, as the half-year DPU already formed 51.0% of our FY13 forecast (50.4% of consensus).
Continues to prove its portfolio resilience
During the quarter, A-REIT renewed and signed new leases totalling 73,874 sqm of industrial space, equivalent to 6.1% of its multi-tenanted buildings’ NLA. While portfolio occupancy eased by a marginal 0.3ppt QoQ to 94.3%, it was mainly due to additional space (20,865 sqm) following the completion of phase 2 AEI at 10 Toh Guan Road in Aug. Excluding that, we note that same-store portfolio occupancy actually improved to 96.6% from 96.4% a quarter ago. In addition, A-REIT shared that positive rental reversions averaging 12.8% were still achieved across all its property types. This is stronger than the 11.6% average seen in 1Q. As the passing rents are generally below the current market rates for the area due for renewal in FY13-14, management guided that positive reversions may possibly continue.
Maintain HOLD on valuation grounds
Going forward, A-REIT expects the acquisition activity to remain ‘quiet’ as it sees limited attractive properties left in the market. Hence, it will focus on the consolidation of its properties. To this extent, A-REIT announced another two asset enhancement initiatives (AEIs) for 31 Ubi Road 1 and 1 Changi Business Park Ave 1 to upgrade the building specifications and enhance their marketability. We now incorporate the results and AEIs into our assumptions. This lifts our fair value from S$2.28 to S$2.43. However, as A-REIT appears fairly priced at current level, we maintain our HOLD rating.
No comments:
Post a Comment