CapitaLand Ascendas REIT - UOB Kay Hian 2023-05-17: Growing Through 3 Initiatives While Preserving Resiliency Of Balance Sheet

• The Shugart at one-north district provides attractive NPI yield of 8.3% (7.8% post-transaction costs). The development of a six storey high-specification ramp-up logistics facility in Singapore provides attractive stabilised yield of 7.5-8.5%.
• Including the potential acquisition in Europe, the basket of 3 initiatives provides DPU accretion of 1.2-1.3%.
• - Read this at SGinvestors.io -

Acquiring Seagate’s R&D facility.

• CapitaLand Ascendas REIT (SGX:A17U) has proposed to acquire The Shugart, a high-specification R&D and business park property at 26 Ayer Rajah Crescent in the one-north district from Seagate Singapore, who will lease back the property for 10 years and has an option to extend for an additional 10 years. The lease has built-in rent escalation of 2.5% per year.
• - Read this at SGinvestors.io -
• The proposed acquisition provides attractive NPI yield of 8.3% (7.8% post-transaction costs). It is accretive to pro forma 2022 DPU by 0.11 cents or 0.7% assuming:
  1. funding structure of equity 60% and debt 40%, and
  2. REIT manager receives base fees 80% in cash and 20% in new units.
• The acquisition is expected to complete in 2Q23.

Potential acquisition in Europe.

• Read more at SGinvestors.io.

Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-05-17 SGinvestors.io

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