Ascendas Reit

Ascendas Reit: 1QFYMar12 results in-line.
Net property income +1.6% yoy, +5.6% yoy to $88.8m. DPU +4.4% yoy, +7.6% qoq.
Occupancies advanced further in 1Q, at 96.2%/ 92.5% for the entire/ multi-tenanted portfolio vs 96%/ 92.1% in 4Q.
Total renewals/ new leases signed in 1Q also expanded 20.4% yoy to 86.2sm.

A-Reit attained positive rental reversion of 1.4 – 11.7% across all the segments of its portfolio. This is expected to persist through FY12, as 10% of its leases are due for renewal this yr, and passing rents are significantly lower than current mkt rents. To illustrate, A-Reit’s expiring leases in Light Industrial, Flatted Factory and Logistics & Distribution Centres are 18.9-24.7% below spot rents.

Gearing is now at 28.7%, which implies debt headroom of $1b for new acquisitions before reaching 40%. The Reit is in the midst of finalizing the rollover of a $200m committed revolving credit facility due in Nov ’11 to 2016. Thereafter, the next refinancing is not until 2013 when $257m is due.
Reit trades at 1.2x P/B, 6.2% fwd yield.

Credit Suisse maintain Underperform with TP $2.01.
StanChart, Macquarie, Morgan Stanley, JPM maintain Neutral with TP btwn $2.08-2.25.
HSBC keeps at Overweight but cuts TP marginally to $2.30 from $2.36.
Citi, RBS maintain Buy with TP $2.28. $2.41 rptvly.
Deutsche maintains Buy, raises TP to $2.30 from $2.26.
DMG upgrades to Buy, raises TP to $2.42 from $2.09.