• Ascendas REIT’s 1QFY19 DPU of 4 Scts, in line, accounting for 24% of our FY3/19 forecast.
• Portfolio occupancy saw a slight dip but rental reversions were positive.
• New AEI at 138 Depot Rd; 41 Changi South Ave 2 divested.
• Maiden venture into UK via purchase of 12 properties for S$373m.
• Maintain ADD with unchanged Target Price of S$2.89.

1QFY3/19 Results Summary

Ascendas REIT’s 1QFY3/19 revenue grew 1.5% y-o-y due to the acquisition of three Australian properties, completion of 50 Kallang Ave and 20 Tuas Ave 1 redevelopment, 10 Woodlands Link,13 International Business Park and 84 Genting Lane as well as positive rental reversion. However, 1Q DPU of 4 Scts is 1% lower y-o-y due to a one-off distribution of rollover adjustments in 1QFY18. Excluding this, DPU would have improved 4% y-o-y, accounting for 24% of our FY19 forecast. 

In 1QFY19, Moody’s upgraded Ascendas REIT’s credit rating outlook to A3 positive (from A3 stable).

Source: CGS-CIMB Research - 30 Jul 2018