CapitaLand Ascendas REIT - RHB Invest 2023-02-06: On A Good Position To Weather Challenges; Keep BUY

• CapitaLand Ascendas REIT (SGX:A17U)'s results for 2022 and 2H were broadly in-line.
• Underpinned by a strong industrial market, CapitaLand Ascendas REIT’s occupancy stands at a 10-year high, coupled with good rent growth, and a good outlook despite challenges.
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CapitaLand Ascendas's 2H22 DPU to rise by 4% y-o-y as operational growth should outpace rising interest and operating costs.

• In 2H, CapitaLand Ascendas REIT's DPU rose 4.3% y-o-y aided by full contributions from completed assets, acquisition of logistics assets in the US, and higher income from Singapore. NPI margin was lower by 2.5ppt y-o-y but improved h-o-h by 0.2ppt to 71.6% as CapitaLand Ascendas REIT increased service charges across its Singapore portfolio in 2H to mitigate cost pressures. We expect NPI margins to stabilise at these levels for FY23.
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Operational outlook remains positive.

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Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-02-06 SGinvestors.io

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