Ascendas REIT - CGS-CIMB Research 2022-09-14: Acquiring Cold Storage Logistics Facility

Ascendas REIT - Acquiring Cold Storage Logistics Facility

ASCENDAS REAL ESTATE INV TRUST (SGX:A17U) | SGinvestors.ioASCENDAS REAL ESTATE INV TRUST (SGX:A17U)
  • Ascendas REIT (SGX:A17U) plans to acquire a cold storage logistics facility in Singapore for S$191.9m, marking the REIT’s entry into cold storage facility investment in Singapore. The purchase price is 1.6% below the May 2022 independent valuation of S$195m. See Ascendas REIT's announcement dated 2022-09-14 for details of the property.
  • This latest acquisition follows the proposed purchase of the Philips APAC Centre in Singapore for S$104.8m, announced in Aug 2022. Together, we estimate these properties could increase Ascendas REIT’s AUM to S$16.9bn, while expanding its exposure to the logistics property sector to ~26% of portfolio value.
  • Not only will the diversification into the cold storage sector expand Ascendas REIT’s customer base, the cold storage property has a weighted average lease expiry of 7 years and its leases have in-built rental escalations of 2-3% every 3 years, thus improving Ascendas REIT’s income stability.
  • Ascendas REIT intends to fund the total purchase consideration of S$196.2m via internal resources and existing debt facilities. We estimate the acquisition will lift Ascendas REIT’s gearing to ~39%. Based on the stated net income yield of 7% (6.9% post transaction cost) for the cold storage property vs Ascendas REIT’s average all-in funding cost of 2.1%, the acquisition is expected to be DPU accretive, in our view.
  • We tweak our FY22-24F DPU estimates for Ascendas REIT up by 0.13-1.41% to factor in contributions from these two new properties. Accordingly, our DDM-based target price for Ascendas REIT is lifted slightly to S$3.21.
  • Ascendas REIT's Share Price is currently trading at 5.7% FY22F yield.




Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.




LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2022-09-14
SGX Stock Analyst Report ADD MAINTAIN ADD 3.21 UP 3.200




Previous report by CGS-CIMB:
2022-08-03 Ascendas REIT - Solid Performance In 1H22

Target prices by 5 other brokers at Ascendas REIT Target Prices.
Listing of broker reports at Ascendas REIT Analyst Report.

Relevant links:
Ascendas REIT Share Price History,
Ascendas REIT Announcements,
Ascendas REIT Dividends & Corp Actions,
Ascendas REIT News Articles





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