Ascendas reit in focus

 

“Buy. A good long-term dividend stock. The stability of A-REIT’s future performance is underpinned by the diversity and depth of its portfolio.

ALP REIT INVESTMENT CLUB

Ascendas Reit (A17U)

(27/05/2016) close: S$2.32

12M-Target price:S$2.55

1.) Type of Reit: Business space and industrial real estate

2.) Number of property in the portfolio: As at 31 March 2016, A-REIT owns a portfolio of 103 properties in Singapore, 27 properties in Australia and and 3 properties in China. 

property

3.) Top 5 properties that generates the highest revenue (Decreasing order): 1, 3 & 5 Changi Business Park Crescent (6.64%), Telepark, 5 Tampines Central 6, (5.41%), 40 Penjuru Lane (4.85%), 31 International Business Park (4.31%), A-REIT City @ Jinqiao, No. 200 Jinsu Road, Jinqiao Economic and Technological Zone, Pudong New District, Shanghai, China (4.01%),

4.) Challenges: The changing regulatory environment in Singapore like shorter industrial land tenure, revised and more stringent subletting policy is a challenge. Moreover, Rental reversionary outlook is likely to turn more muted given closing gap between market and passing rental levels.

5.) Strengths: Highly diversified portfolio with assets distributed across Business & Science Park Properties , Hi-Specifications Industrial Properties & Data Centres and Light Industrial Properties & Flatted Factories. As such, profits are less vulnerable to challenges faced in any specific industry as the assets in the other industries are left unscathed.

6.) Significant events:  The acquisition of ONE@Changi City in March 2016.

Capture

ONE@Changi City

 7.) TABLE:

asndas reit (data) 

8.) Recommendation: Buy. A good stock for investors seeking dividend stocks. General trend for DPU of this REIT is stable and if not increasing slightly. NAV is also on a constant increasing trend which signifies healthy growth, leading to increased profits for buyers.  The stability of A-REIT’s future performance is underpinned by the diversity and depth of its portfolio. However, a deterioration in the economic outlook could have a negative impact on industrial rents and occupancies as companies cut back production and require less space; industrial rents have a strong correlation with GDP growth.

 COMPILED BY:Mao Qing Rong

DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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