ASCENDAS REAL ESTATE INV TRUST (SGX:A17U)
Ascendas REIT - Mixed Operating Metrics
- Portfolio occupancy declined slightly to 90.6%.
- Positive rental reversions of 3.0%.
- Aggregate leverage ratio increased to 38.0% after acquisition completion.
Ascendas REIT's 1Q21 business update exhibited mixed operational performance
- Ascendas REIT (SGX:A17U) provided a business update for its 1Q21 performance. No income statement financial metrics were disclosed, but operationally, Ascendas REIT said that its portfolio occupancy declined slightly by 1.1 percentage points (ppt) q-o-q to 90.6%. Only its UK/Europe assets showed an improvement in occupancy (+1.1 ppt to 98.6%), while there were declines seen in Singapore (-1.5 ppt to 86.9%), Australia (-2.5 ppt to 94.9%) and the US (-0.4 ppt to 92.5%).
- For Singapore and Australia, there were one building each which became vacant following non-renewals, and the building in Singapore has been earmarked for redevelopment.
- On the other hand, Ascendas REIT’s Unit 5, Wellesbourne Distribution Park property in the UK saw its occupancy move from 0% to 100%, while it completed the acquisition of a portfolio of 11 data centres in Europe on 17 Mar 2021. Following this acquisition, data centres formed 10% of Ascendas REIT’s total AUM of S$15.1b.
Rental reversions positive at 3.0%
- Although occupancy disappointed, Ascendas REIT’s average portfolio rental reversions came in positive at 3.0% for 1Q21.
- In Singapore, this was +2.9%, as rental uplifts in its Business & Science Parks (+2.8%), Logistics & Distribution Centres (+5.6%) and Light Industrial and Flatted Factories (+0.8%) segments were partially offset by declines at its Integrated Development, Amenities & Retail (-2.7%) and High-Specifications Industrial and Data Centres (-0.9%) segments. Management reiterated its guidance for positive low-single digit rental reversions for FY21.
Aggregate leverage ratio increased to 38.0%
- Ascendas REIT’s aggregate leverage ratio increased from 32.8% (as at 31 Dec 2020) to 38.0% after the completion of the aforementioned acquisition of the portfolio of 11 data centres in Europe. However, its weighted average all-in debt cost fell by 50 basis points q-o-q to 2.2% which was likely due to the lower funding costs for the European acquisition.
- We maintain our forecasts and S$3.84 fair value estimate for Ascendas REIT.
- See Ascendas REIT Share Price; Ascendas REIT Target Price; Ascendas REIT Analyst Reports; Ascendas REIT Dividend History; Ascendas REIT Announcements; Ascendas REIT Latest News.
OCBC Research Team
OCBC Investment Research
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https://www.iocbc.com/
2021-04-26
SGX Stock
Analyst Report
3.84
DOWN
3.84
