Ascott Residence Trust

UOBKayhian on 22 Jan 2014

FY14F DPU Yld (%): 6.8
FY15F DPU Yld (%): 7.0

Results in line, no major surprises. Ascott Residence Trust (ART) reported 4Q13 DPU
(excluding rights impact) of 1.96 cents, bringing 2013 DPU (excluding rights impact) to
9.03 cents, in line with our and consensus estimates. RevPAU for 2013 remained
relatively steady at around S$143/day (2012: S$145) on same-store basis (excluding
divestments and acquisitions).

Maintain HOLD and target price of S$1.31. Key re-rating catalyst is potential near-term
yield-accretive acquisitions. Our valuation is based on a two-stage DDM model
(required rate of return: 8.2% and terminal growth rate: 2.0%). ART is currently trading
at 2014-15F yields of 6.8% and 7.1% respectively. Entry price is S$1.15.