Ascott Residence Trust

Ascott Residence Trust: 1Q12 results inline. DPU was 2.14 cts, flat yoy, on distributable income of $24.2m (+1% yoy). Revenue +6% yoy to $71.6m, mainly due to the $1.9m contribution from Citadines Shinjuku (acq dec ’11) and stronger performance from the group’s serviced residences in China, the Philippines, and UK, where RevPAU growth was +22% yoy, +15% and +9% respectively. Moving forward, UOBK expects a stronger performance from the UK serviced residences on the back of the upcoming Olympic games in 3Q, and also expects better demand for the serviced residences in the Philippines and Australia due to higher demand from the O&G and mining industries. Gearing stood at 0.42x with a wt avg debt to maturity of 3.1yrs and an interest cover of 3.6x. Having just completed a ¥1.2b acq in Kyoto, Japan, mgt said it continues to explore acquisitive opportunities. UOBK keeps at Buy with TP $1.25. Morgan Stanley keeps at equalweight. Says valuation levels are currently fair, with FY12E yield at 7.8% and 0.8x P/B.