Ascendas REIT - DBS Research 2022-08-03: Confident Of Further Positive Rental Reversions

Ascendas REIT's 1H22 results highlights:

Higher revenues from acquisitions and completed developments.

• Ascendas REIT (SGX:A17U)'s 1H22 revenues increased 13.7% y-o-y to S$666.5m due mainly to contributions from acquisitions in the past year.
  • - Read this at SGinvestors.io -
  • 75% interest in Galaxis (June 2021).
  • 11 logistics properties in Kansas City (November 2021).
  • 7 logistics properties in Chicago (June 2022).
  • Completion of Grab HQ (July 2021).
  • Several other development completions in Singapore and Australia.
• Higher revenues were partially offset by divestments
  • 1314 Ferntree Gully Road, Melbourne (June 2021).
  • 82 Noosa Street and 62 Stradbroke Street, Brisbane (July 2021).
• 1H22 NPI increased 7.0% y-o-y to S$476.9m in tandem with higher revenues
  • - Read this at SGinvestors.io -
  • Utilities made up ~23% of OPEX, and ~17% is recoverable from tenants.
• .NPI margins fell from ~74.3% to ~70.3% y-o-y mainly due to higher utilities cost for Singapore properties
  • Expect margins to remain close to current levels as utility contracts have been locked in until December 2022.

1H22 DPU of 7.873 cents in line with projections.

13.2% positive rental reversions in 2Q22.

Portfolio occupancy improved further to 94.0%.

Capital management metrics maintained, but could see financing costs edge up.

S$566m worth of ongoing projects to drive income growth.

Our Thoughts

• Read more at SGinvestors.io.

Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-08-03 SGinvestors.io

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