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Ascendas India Trust Overweight
AINT.SI, AIT SP
Steady 3QFY11. New project completions provide a boost to the operational portfolio.
• 3QFY11 results – AIT reported 3QFY11 DPU of S$0.0172/unit +1%
Q/Q. 9MFY11 dividend of S$0.0508 implies an annualized yield of
7.1%. While underlying portfolio rental income (INR terms) remained
largely stable (+1% Q/Q); net property income was down 7% Q/Q on
account of provision for increase in electricity tariffs at ITPB with
retrospective effect (since Jun-08). Adjusted for this (S$1.1M), the
NPI was stable Q/Q. While the company is contesting the imposition
of higher tariffs with the authorities; it is also in discussion with the
tenants for the recovery of the same (if applicable) going ahead.
Reported book value as of Dec-Q stood at S$0.83/unit.
• Operational performance remains steady - Overall occupancy
across AIT’s existing portfolio (4.8msf) at 98% increased marginally
by 100bps Q/Q and remains materially above the market occupancy
rates (60%-97%). We note that AIT has been able to keep its
occupancy levels steady at 97-98% despite witnessing high lease
expiries over the last 3 quarters. With the new leases/renewals done in
Dec-Q, only 8.5% of the portfolio is coming up for renewals in
4QFY11. FY12 /13 onwards 22.6-18.5% renewals will come in.
• New project completions of 1.2msf boost the trust’s income
producing portfolio by 25% (to ~6msf) over Dec-Q. Additionally,
0.5msf of office space is expected to become operational by mid-2011
thereby taking its overall operational portfolio to 6.5msf. While we
note that incremental leasing across new properties has been a bit slow
over Dec-Q (c28%-49% leased); management indicated that the
enquiries remain quite encouraging and should result in meaningful
leasing pick up going ahead. These new projects are expected to start
contributing meaningfully to the rental income from FY12 onwards.
• Maintain OW with DCF based Mar-11 PT of S$1.1/unit. AIT is
now trading at a FY12 dividend yield of 7.9%, not cheap given the
Indian government 10 year bond yield at 7.8% (pre tax). However, we
think the trust offers healthy near term growth via new completions
which have started to come on stream. Key risks will be 1) Inability to
substantially pre-lease the recently completed buildings; 2) sustained
increase in rates going ahead.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Ascendas India Trust Overweight
AINT.SI, AIT SP
Steady 3QFY11. New project completions provide a boost to the operational portfolio.
• 3QFY11 results – AIT reported 3QFY11 DPU of S$0.0172/unit +1%
Q/Q. 9MFY11 dividend of S$0.0508 implies an annualized yield of
7.1%. While underlying portfolio rental income (INR terms) remained
largely stable (+1% Q/Q); net property income was down 7% Q/Q on
account of provision for increase in electricity tariffs at ITPB with
retrospective effect (since Jun-08). Adjusted for this (S$1.1M), the
NPI was stable Q/Q. While the company is contesting the imposition
of higher tariffs with the authorities; it is also in discussion with the
tenants for the recovery of the same (if applicable) going ahead.
Reported book value as of Dec-Q stood at S$0.83/unit.
• Operational performance remains steady - Overall occupancy
across AIT’s existing portfolio (4.8msf) at 98% increased marginally
by 100bps Q/Q and remains materially above the market occupancy
rates (60%-97%). We note that AIT has been able to keep its
occupancy levels steady at 97-98% despite witnessing high lease
expiries over the last 3 quarters. With the new leases/renewals done in
Dec-Q, only 8.5% of the portfolio is coming up for renewals in
4QFY11. FY12 /13 onwards 22.6-18.5% renewals will come in.
• New project completions of 1.2msf boost the trust’s income
producing portfolio by 25% (to ~6msf) over Dec-Q. Additionally,
0.5msf of office space is expected to become operational by mid-2011
thereby taking its overall operational portfolio to 6.5msf. While we
note that incremental leasing across new properties has been a bit slow
over Dec-Q (c28%-49% leased); management indicated that the
enquiries remain quite encouraging and should result in meaningful
leasing pick up going ahead. These new projects are expected to start
contributing meaningfully to the rental income from FY12 onwards.
• Maintain OW with DCF based Mar-11 PT of S$1.1/unit. AIT is
now trading at a FY12 dividend yield of 7.9%, not cheap given the
Indian government 10 year bond yield at 7.8% (pre tax). However, we
think the trust offers healthy near term growth via new completions
which have started to come on stream. Key risks will be 1) Inability to
substantially pre-lease the recently completed buildings; 2) sustained
increase in rates going ahead.
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