Ascendas REIT - RHB Invest 2016-10-28: Divestment of A-REIT City @ Jinqiao in China

Ascendas REIT - RHB Invest 2016-10-28: Divestment of A-REIT City @ Jinqiao in China ASCENDAS REAL ESTATE INV TRUST A17U.SI

Ascendas REIT - Divestment of A-REIT City @ Jinqiao in China

  • Ascendas REIT has announced divestment of A-REIT City @ Jinqiao, a business park property located in Shanghai for SGD221.6m (CNY1.08bn). The purchaser of the property is Wkland Investments II Limited and Vanke Property (Hong Kong) Company Limited. The divestment is expected to be completed in 3QFY16/17.
  • This is AREIT's third divestment in China this year, following which the REIT will have no direct exposure to industrial properties in China. Management had earlier noted that it requires scale to be successful in China industrial market and would re-look at the market if it comes across good set of assets. 
  • The divestment value is 81% higher than its 2013 purchase price of SGD122.3m and 9% higher than its latest book value. 
  • With gearing lowered to 33% post divestment, we expect management to do more acquisition in Australia in near term. 
  • Pro forma FY16 DPU would have improved by about 0.13 Singapore cents, assuming the divestment was completed on 1 Apr 2015.
  • We view the divestment to be beneficial to Ascendas REIT and maintain BUY with TP of SGD2.63.




Vijay Natarajan RHB Invest | http://www.rhbinvest.com.sg/ 2016-10-28
RHB Invest SGX Stock Analyst Report BUY Maintain BUY 2.63 Same 2.630



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