Ascendas REIT - RHB Invest 2016-06-09: Divestment of Jiashan Logistics Center in Shanghai

Ascendas REIT - RHB Invest 2016-06-09: Divestment of Jiashan Logistics Center in Shanghai 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 | Vijay Natarajan RHB Invest | http://www.rhbinvest.com.sg/ 2016-06-09
RHB Invest SGX Stock Analyst Report BUY Maintain BUY 2.63 SAME 2.63


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