Investment Thesis – Ascendas REIT (SGX:A17U) Financials

(The “Understanding the Business” segment will be put in a future SWOT analysis post)

Net Property Income (NPI) and Distributable Income

2018-06-29 (1).png
Positive growth over last 5 years for all metrics.

Distribution Per Unit (DPU)

asdasd.jpg
Source: Illustration by author (based on info from AREIT website)

Consistent growth over last 8 years. Huge fall in DPU during 2007 Recession.

Property Yield (Cap Rate)

2018-06-29 (2).png
Target between 5% – 9%.

Gearing

2018-06-29 (3)1.png
REITs have a gearing limit of 45% (refer to RESPONSE TO FEEDBACK RECEIVED – CONSULTATION ON ENHANCEMENTS TO THE REGULATORY REGIME GOVERNING REITS AND REIT MANAGERS pg 10)

Interest Coverage Ratio

03/2018: 5.9x
03/2017: 5.7x
Target above 4x.

Occupancy Rate and Rental Reversion

2018-06-29 (3).png

 P/B Ratio

Price = $2.65 (as of 29/06/2018)
Book = Net Asset Value per unit = $2.12
P/B Ratio = 1.25 (market price is 25% more expensive than book value)

Summary

Ascendas REIT’s strong historical track records and ability to support future growth makes the business very attractive. But the current market price is quite expensive. If, however, the company can grow its asset values, then this would be a very enticing investment.

 

Sources:

Ascendas REIT Annual Report FY17/18

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