Ascott Residence Trust

Ascott Residence Trust: After its recent acquisition of three serviced residence properties in China and 11 rental housing properties in Japan (2 May 2013), CS increase its FY13-15 DPU estimates by 4.8-6.5% based on the acquisitions Collectively, the 14 properties will be acquired at a total cost of $166.8m ($19m funded by debt and $147.8m from proceeds raised from the placement of 114.9m units in Feb-13). The properties will be acquired at an EBITDA yield of 5.4%. The acquisitions will add a total of 1,576 apartment units to the current 7,060 units, thereby increasing the share of total assets in China from 10% to 15%, and in Japan from 12% to 15%. Total exposure to Asia should increase from 59% to 63%. CS maintains NEUTRAL, increases TP to $1.47 ($1.44 previously). Potential upside is limited (only 7%), although the downside risk is supported by the 6.3% DPU yield.