Ascendas India Trust Review @ 10 February 2022

Basic Profile & Key Statistics

Ascendas India Trust (AIT) invests mainly in office properties and owns 9 properties in India.

Performance Highlight

Total property income and NPI have improved YoY due to contribution from Anchor Annex building at ITPB and aVance 6 at aVance Hyderabad. However, distributable income and DPU has decreased as there is a one-off reversal of Dividend Distribution Tax provision in FY 2020. 

Rental Reversion

FY21 rental reversion is positive for all properties besides aVance Pune.

Acquisition

On 29 October 2021, AIT completed the acquisition of land for the development of a data centre campus in Navi Mumbai. On 23 November 2021, AIT has also completed the acquisition of building Q1 in Aurum Q Parc.

Pipeline

3 developments which are expected to completed by 2H 2021 have been delayed to 2022. Besides aVance A2 which is being on hold, remaining are expected to be completed between 2024 and 2025.

Related Parties Shareholding

• REIT sponsor's shareholding is low at 21.611%
• REIT manager's shareholding is high at 5.81%
• Directors of REIT manager's shareholding is low at 0.07%

Lease Profile

• Occupancy is low at 87%
• All income is received in India Rupee
• WALE is moderate at 3.6 years
• Highest lease expiry within 5 years is high at 39% which falls in 2026 and beyond, without breakdown
• Most of the properties are freehold

Debt Profile

• Gearing ratio is slightly low at 35%
• Cost of debt is high at 5.2%
• Fixed rate debt % is moderate at 75%
• All debts or unsecured debts
• WADM is short at 1.86 years
• Highest debt maturity within 5 years is high at 42.3% which falls in 2022
• Interest coverage ratio is low at 3.7 times

Diversification Profile

• Top geographical contribution is low at 35.5% 
• Top property contribution is high at 35.5% 
• Top 5 properties contribution is high at 86% 
• Top tenant contribution is high at 14% 
• Top 10 tenants contribution is high at 44.8%

Key Financial Metrics

• Property yield is high at 7.5% 
• Management fees over distribution is high at 18.8% in which unitholders receive S$ 5.32 for every dollar paid 
• Distribution on capital is slightly high at 3.9%
• Distribution margin is moderate at 46.7%

Trends

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

Relative Valuation

• P/NAV - Below -1SD for 1y, 3y and 5y
• Dividend Yield - Above +1SD for 1y; Average for 3y and 5y

Author's Opinion

Favorable	Less Favorable
High REIT Manager's Shareholding	Low REIT Sponsor's Shareholding
Mostly Freehold Properties	Low Directors of REIT Manager's Shareholding
100% Unsecured Debt	Low Occupancy
Low Top Geographical Contribution	All income is received in India Rupee
High Property Yield	High Cost of Debt
High Distribution on Capital	Short WADM
DPU Uptrend	Concentrated Debt Maturity
NAV per Unit Uptrend	Low Interest Coverage Ratio
Distribution Margin Uptrend	High Top Property & Top 5 Properties Contributions
	High Top Tenant & Top 10 Tenants Contributions
	Non-Competitive Management Fees
	Property Yield Downtrend

The occupancy has declined from 99% at 1Q 2020 to the current level of 87%. Despite the dropping occupancy rate and unfavourable foreign exchange rate, NPI continue to improve, albeit DPU is lower than 1H 2021 due to higher income tax expenses. 

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

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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 and 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.