CapitaLand Ascendas REIT - Maybank Research 2023-05-17: Fortifying Leadership In Business Space With Accretive Deals But Fairly Valued

• CapitaLand Ascendas REIT (SGX:A17U) has proposed to acquire assets in Singapore and Europe, and redevelop a local logistics facility. These will be funded by equity fund raising (EFR) and debt. These deals could lower gearing and be DPU- accretive (by a low-single digit).
• - Read this at SGinvestors.io -
• Valuation is fair with CapitaLand Ascendas REIT yielding 5.5% and trading at 1.2x book. We cut estimates due to higher borrowing costs and maintain HOLD.

Buy assets in Singapore and Europe, planned EFR

• CapitaLand Ascendas REIT plans to acquire a business park in Singapore from Seagate for S$218.2m. Seagate would lease it back from CapitaLand Ascendas REIT for 10 years, with the option to extend it by another 10 years. CapitaLand Ascendas REIT would have annual rent increase of 2.5%.
• - Read this at SGinvestors.io -
• CapitaLand Ascendas REIT also plans to redevelop a cargo-lift logistics facility into a ramp-up facility for S$107m.
• These will be funded by S$500m EFR (upsized and at lower end of pricing range) and S$- and EUR-denominated debt costing ~4% and ~5% respectively. S$160.4m of the proceeds will be used for debt repayment and the rest for asset purchases and redevelopment.

Expands existing footprint, accretive deal

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-05-17 SGinvestors.io

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