Ascendas REIT

Ascendas REIT (AREIT): Post management meeting, Daiwa maintains its HOLD rating (6-month TP $2.23) on the back of the modest leasing progress on some of its recent acquisitions and investments, while downside risk is still present on the uncertainty of Singapore's industrial-property segment. Management expects some positive rental reversions in the overall portfolio in the coming quarters, underpinned by several of its development properties nearly on full occupancy. AREIT's gearing was 30% as at 31 Dec 2013. Management indicated that AREIT has about $1.2b of debt headroom (before 40% gearing level) to fund its asset-enhancement initiatives and acquisitions. It expects the gearing to rise to about 33-34% after funding all of its existing capital commitments.