Ascendas REIT - OCBC Investment 2016-06-09: Proposed divestment of Jiashan Logistics Centre

Ascendas REIT - OCBC Investment 2016-06-09: Proposed divestment of Jiashan Logistics Centre Ascendas REIT ASCENDAS REAL ESTATE INV TRUST A17U.SI 

Ascendas REIT: Proposed divestment of Jiashan Logistics Centre

  • Ascendas REIT (A-REIT) announced that it has entered into a Sale and Purchase agreement with Goodman Developments Asia and GCLP Developments No. 3 (BI) Ltd, whereby it will divest its Jiashan Logistics Centre (JLC) at an attributable property value of S$26.0m (~RMB125m). 
  • JLC is a logistics facility located near Shanghai, and its development was completed by A-REIT in Mar this year. The attributable property value of S$26.0m comes in 24% higher than the total development costs of ~S$20.9m and is also 3% above the property’s book value of S$25.2m, as at 31 Mar 2016. 
  • The property had zero occupancy, as at 31 Mar 2016. 
  • Net proceeds after tax and divestment cost are expected to be S$23.5m, and this deal is estimated to be completed in 1QFY17. 
  • This proposed divestment comes shortly after A-REIT proposed to sell its Ascendas Z-link business park property in Beijing in late May this year, a reflection of its continued capital recycling strategy. 
  • We maintain our BUY rating and S$2.56 fair value on A-REIT.




Wong Teck Ching Andy CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-06-09
OCBC Securities SGX Stock Analyst Report BUY MAINTAIN BUY 2.56 Same 2.56


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