Ascendas REIT - OCBC Investment 2016-10-28: Proposed divestment of its last China property

Ascendas REIT - OCBC Investment 2016-10-28: Proposed divestment of its last China property ASCENDAS REAL ESTATE INV TRUST A17U.SI

Ascendas REIT - Proposed divestment of its last China property

  • Ascendas REIT (A-REIT) announced that it has entered into a Sale and Purchase agreement with two indirect wholly-owned subsidiaries of China Vanke for the divestment of its A-REIT City@Jinqiao business park property in Shanghai for an attributable property value of S$221.6m (~RMB1.1b). 
  • This is A-REIT’s last remaining property in China following the divestment its two other China properties this year. 
  • The attributable property value of S$221.6m is approximately 1.8x of the original property value of S$122.3m when it was acquired in 2013, and is also 8.6% above the property’s book value of S$204.0m, as at 31 Mar 2016. If A-REIT were to use the net proceeds to pare down its debt, its aggregate leverage will be lowered by 1.4 ppt.
  • Given its proposed divestment of its last property in China, we now expect A-REIT to focus on expanding its footprint in Singapore and Australia. 
  • Maintain BUY and S$2.67 fair value on the stock. 




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2016-10-28
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 2.67 Same 2.67




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