Ascendas Reit

Ascendas Reit: no major surprises in 3QFYMar11 results. Net property income +3.3% yoy to $84.1m; DPU +0.6% yoy to 3.29cts, translating to annualized div yield of 6.1%. This was mainly driven by qoq improvement in overall occupancy to 95.6% from 91.1%. Also rental rates for new space leased in the Business & Science Parks, and Light Industrial sectors continued to grow for the 2nd consecutive qtr by 12.2% and 6.0% qoq, r’ptively. Gearing remains healthy at 34.7%...

Catalysts ahead include i) progressive leasing of the newly completed Phase 2 of Plot 8 Changi Business Park from Feb ’11, ii) completion of a built-to-suit logistics facility in Changi by 4QFY11, and iii) asset enhancement initiatives at 3 existing developments expected to deliver wt avg yield >8.5%.
Mgt expects to at least maintain the previous financial yr’s level of net income for FY11.
The majority of Street rates at Buy and Hold, with recent targets (pre-results) ranging $2.11-2.50.