Ascendas India Trust Review @ 9 February 2021

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.

Performance Review

Total property income and NPI decreased YoY by 8% and 2% respectively due to lower income from carpark and utilities as well as increase of SGX/INR FX rate. Income to be distributed increased by 3% YoY mainly due to interest income from Arshiya, AURUM IT SEZ and BlueRidge 3. DPU on the other hand, decreased by 3% YoY mainly due to a combination of enlarged unitholder base and increase of SGX/INR FX rate.

Rental reversion for FY2020 is positive for all 8 properties.

Development for Endeavour was (previously known as MTB 5)was completed in November 2020.

Above are committed forward purchase deals that are in development (besides Arshiya Khurja which is in the midst of acquisition) which would increase the existing floor area by 65% upon acquisition.  Most developments are expected to be completed by 2021.

Lease Profile

• Occupancy is moderate at 94%
• All income is received in India Rupee
• WALE is short at 3.5 years
• Highest lease expiry within 5 years is moderate at 30.2% which falls in 2025 & beyond, without breakdown.
• Most of the properties are freehold

Debt Profile

• Gearing ratio is low at 30%
• Cost of debt is high at 5.3%
• Fixed rate debt % is high at 86%
• All debts are unsecured debt
• WADE is short at 2.33 years (estimated)
• Highest debt maturity within 5 years is slightly low at 28.6% which falls in 2022
• Interest coverage ratio is slightly high at 3.8 times

Diversification Profile

• Top geographical contribution is low at 39% (from 2019 Annual Report)
• Top property contribution is high at 39% (from 2019 Annual Report)
• Top tenant contribution is low at 9.2% 
• Top 10 tenants contribution is moderate at 38.2% 

Key Financial Metrics

• Property yield is high at 7.8%
• Management fees over distribution is slightly high at 15.8% in which unitholders receive S$ 6.33 for every dollar paid
• Distribution on capital is high at 4.9% 
• Distribution margin is slightly high at 52.9%

Trends

• Uptrend - DPU, NAV per Unit, Distribution Margin
• Slight Uptrend - Interest Coverage Ratio 
• Flat - Distribution on Capital
• Downtrend - Property Yield

Relative Valuation

• Dividend Yield - Past 4 quarters DPU @ 8.83 cents / average yield @ 5.9% = S$ 1.50
• Price/NAV - NAV @ S$ 1.076 x average P/NAV @ 1.32 = S$ 1.42

Author's Opinion

Favorable	Less Favorable
Mostly Freehold Properties	All income is received in India Rupee
Low Gearing Ratio	Short WALE
100% Unsecured Debt	High Cost of Debt
Low Top Geographical Contribution	Short WADE
Low Top Tenant Contribution	High Top Property Contribution
High Property Yield	Property Yield Downtrend
High Distribution on Capital
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

2H performance is slightly affected by the SGX/IDR FX movement. With the upcoming acquisition of those forward purchase pipelines, AIT income should improve moving forward; albeit SGD/IDR FX movement remains a risk factor.

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

REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF

REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the 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.