Ascendas REIT

Ascendas REIT: -3.8% at $2.01, holding above the $1.99 pricing of its private placement of 150m new units to raise $298.5m. The unexpected placement may have been opportunistic due to rich valuations, UOB KayHian says, noting A-REIT trades at 1.11X P/B vs the sector's 1X. Add that with an anticipated slowdown in growth in SG and China, A-REIT's investment in a greenfield business park in Shanghai ($118m) and a greenfield business park development at Fusionopolis ($110m), at 4% of its total portfolio, increases its risk profile, especially as there have been no pre-commitments by tenants. Aggressive China expansion may also dilute its proxy status for SG industrial space, it says, although noting China assets are currently less than 3% of the portfolio. House cuts TP to $1.80 from $1.90 and maintains Sell after lowering FY13-15 DPU forecasts by 5%-7% on the placement's dilution. $1.99 is likely to remain support.