Ascendas India Trust Analysis @ 5 November 2020

Basic Profile & Key Statistics

Ascendas India Trust (AIT) invests in mainly office properties which owns 8 properties. Although AIT is listed as a business trust, it operates similarly to REIT.

Quarter Performance Review

Top property income and net property income in SGD reduced by 5% YoY, mainly due to SGD/INR forex rate increase. 

Above are committed forward purchase deals which are in development (besides Arshiya Khurja which is in the midst of acquisition) which would increase the existing floor area by 74% upon acquisition. MTB 5 is expected to handover to its tenant by 2H 2020. Most developments are expected to be completed by 2021.

Lease Profile

Occupancy drops slightly from 98% to 96%. All income is received in India Rupee. WALE is slightly short at 3.6 years where the highest lease expiry of 48% falls in  FY2024 and beyond, without breakdown. Most of AIT properties are freehold.

Debt Profile

Gearing ratio is low at 30%. Cost of debt is high at 5.5% despite 100% unsecured debt. Fixed rate debt % is high at 89%. Interest cover ratio is moderate at 4 times. WADE is short at 2.45 years where the highest debt maturity of 30.7% falls in FY2022.

Diversification Profile

International Tech Park Bangalore contributes 39% of AIT income, which is low in terms of top geographical contribution but high in terms of top property contribution. Top tenant contribution is low at 8.7% while top 10 tenants contribution is slightly high at 37.7%.

Key Financial Metrics

Property yield and distribution on capital are high at 7.8% and 4.9% respectively. Management fee is not competitive in which unitholders receive S$ 6.33 for every dollar paid to the manager. Distribution margin is moderate at 50.5%.

Trends

Uptrend - DPU, NAV per Unit, Distribution Margin

Flat - Interest Cover Ratio    

Downtrend - Property Yield

Relative Valuation

i) Average Dividend Yield  - Average yield at 6.04%,  apply the annualized past 4 quarters DPU of 9.01 cents will get S$ 1.49.

ii) Average Price/NAV - Average value at 1.33, apply the latest NAV of S$ 1.11 will get S$ 1.48.

Author's Opinion

Favorable	Less Favorable
Most Freehold Property	100% Income Received in India Rupee
Low Gearing Ratio	High Cost of Debt
100% Unsecured Debt	Short WADE
Low Top Geographical Contribution	High Top Property Contribution
Low Top Tenant Contribution	Non-Competitive Management Fees
High Property Yield	Property Yield Downtrend
High Distribution on Capital
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

AIT performance and fundamentals are not affected by COVID-19 situation. Moving forward, AIT performance is expected to be improved by the acquisition of those forward purchase pipeline upon its completion.

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss, or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.