Ascendas Reit: emerged top bidder for a business park site at Fusionopolis at $110m ($409 psf GFA) out of 7 bidders comprising a mix of developers and REITS. A-Reit’s bid is 29% higher than 2nd place Mapletree Industrial Trust. The 60-year lease site is to have 40% office space and the remainder as Business Park Space. The focus will be on attracting Infocomm Tech & Media industries and R&D activities in Physical Science and Engineering. Gearing is expected to increase to 33.2% from 31.1%...
Deutsche notes that using $5psf rent (from neighbouring Solaris Biz Park), and assuming total development cost of $180m, implies yield of 5.7%. A 20% rise in gross rentals could boost yields to 7%. But believes deal is still not particularly attractive vs A-Reit’s 8.5% yields in past build-to-suit projects. DB estimates slight dilution (0.2 – 0.7%) in FY12/13 DPU due to increased financing and time-lag, with a 2-2.5% increase in FY14 DPU...
Stock currently trades at 6.5% FY12E yield and 1.15X P/B. DB has Buy on stock with TP $2.26.
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