Ascendas REIT

Ascendas REIT: 4QFY14 results in-line. DPU was 16% higher y/y at 3.55¢, bringing full year DPU to 14.24¢ (+3.6%). 4QFY14 distributable income rose 21.9% to $83.9m. Revenue and NPI rose 7.7% and 12.2% to $156.5m and 112.3m respectively, from rental income from The Galen, Nexus@one-north, A-REIT City@Jinqiao and positive rental reversions. Portfolio occupancy was relatively flat at 89.6% q/q. However, excluding the effects of new properties, portfolio occupancy would have been steady at 94% y/y. WALE stood at 3.9 years. Aggregate leverage crept to 30.8% from 28.3% on the back of current AEIs. Assuming 40% leverage, A-REIT would still have room for $1.2b of debt. A-REIT announced 2 new AEIs in the quarter, for C&P logistics hub and Techlink&Techview. The divestment of 1 Kallang Place (BV: $10.5m) was proposed and is expected to complete by May 2014. Going forward, management expects single-digit rental reversions, and CS believes growth is already in the price. High vacancy and lack of acquisition opportunities may also limit further upside. NAV at end Mar was $2.02 (FY13: $1.94), translating to P/B of 1.15x. FY14 yield is 6.1%. Latest broker ratings as follows: Deutsche maintains Buy with TP slightly increased to $2.55 from $2.55 HSBC maintains Neutral with TP $2.35 CS remains Neutral with TP $ 2.48