Ascendas REIT
ASCENDAS REAL ESTATE INV TRUST
A17U.SI
Ascendas REIT: Divestment of Jiashan Logistics Center in Shanghai
- Ascendas REIT (AREIT SP, BUY TP: SGD2.63) announced its divestment of its Jiashan Logistics Centre in Shanghai for CNY125m (SGD26m).
- Recall that the REIT secured its 57,513 sqm plot of land in Mar 15, and have recently completed its development in Mar 16 for a total development cost of approximately SGD20.9m.
- We think that it is an opportunistic move from AREIT as the divestment price represents an attractive return of 24.4% on its total development cost (inclusive of land cost) in just a short fifteen-months period.
- The sale price also represents c.3% above book value. This is well aligned with its capital recycling strategy.
- Given that the REIT has recently announced two divestments in China in the past two weeks, this could signal that it may have an intention to allocate its resources elsewhere – such as Australia.
- Overall, we view that the divestment is beneficial to the REIT.
- We maintain Buy with TP of SGD2.63 on the counter.
Ivan Looi
RHB Invest
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Vijay Natarajan
RHB Invest
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http://www.rhbinvest.com.sg/
2016-06-09
RHB Invest
SGX Stock
Analyst Report
2.63
SAME
2.63
