Ascendas REIT Consistent in its Dividend Delivery, says Singapore Company Incorporation

July 19, 2010 - PRLog -- Ascendas REIT’s (A-REIT) 1QFY Mar11 results were in line with our estimates. The company also declared a DPU of 3.37 cents. Net property income increased by 8.2% yoy to $87.3m thanks to an enlarged property portfolio. Portfolio occupancy remained stable at 95.6% with certain sub-sectors still enjoying positive rental reversion. In fact, Singapore’s robust economic growth has sparked recovery in the industrial property market and we expect A-REIT to benefit from this trend.

A-REIT is trading at FY Mar11 yield of 6.7%, more than 400 bps above the 10-year Singapore government bond yield. Potential acquisitions and positive economic data points are catalysts for the stock. Near-term risk could come from the planned listing of Mapletree Industrial Trust in 2H10, which might dilute investor interest in A-REIT. Maintain BUY with a target price of $2.32.

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