Ascendas Reit

Ascendas Reit: Placement of 160m new units at $2.54, to help finance two potential acquisitions: 1) $126m property in Spore Science Park II, and 2) an integrated industrial mixed-use development at Kallang Avenue, currently under construction, with an expected value upon completion of $490m. Daiwa maintains U/p, TP $2.25, valuation demanding, revised down FY14 DPU forecast by 0.5% and revised up FY15 DPU forecast by 2%. Assumed a NPI yield of 6.5% for the two properties and that their income will be stabilised by FY15. Deutsche maintains Buy, TP $2.70, Mild upfront dilution but longer-term accretive, estimated blended yield of c.6.3% appears in line with past acquisitions. Continue to like AREIT’s stable, well-diversified portfolio and defensive yield.