- CapitaLand Ascendas REIT (SGX:A17U) reported 2H23 DPU of S$0.0744, -3.6% h-o-h, -6.1% y-o-y. FY23 DPU of S$0.1516 was -4% y-o-y, 2% below consensus and our estimates.
- We cut our DPU estimates by ~6%. Combined with a lower discount rate, our DDM-based target price inches up to S$2.75, leaving us with limited upside of 2% and forcing us to downgrade CapitaLand Ascendas REIT to HOLD.
Strong reversions but sharp rise in borrowing cost
- - Read this at SGinvestors.io -
- Portfolio metrics were mixed with mild slippage in occupancy but mid-teens positive reversion. Same-store valuation was lower.
Higher costs offset top-line growth
- - Read this at SGinvestors.io -
- Growth in utility costs and property taxes moderated the growth in NPI and led to 250bps lower margins for the full year.
- Furthermore, CapitaLand Ascendas REIT's borrowing cost jumped 26% and 37% y-o-y for 2H and full year, respectively, due to 20/100bps increases in funding cost on h-o-h/ y-o-y basis to 3.5%. Funding cost guide is for 4.0% for FY24. Gearing rose ~120bps h-o-h to 37.9%.
Strong reversions, lower occupancy
- Read more at SGinvestors.io.
