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Friday, August 21, 2020

Ascendas India Trust Analysis @ 21 August 2020

Basic Profile & Key Statistics

Ascendas India Trust (AIT) is listed as Business Trust instead of REIT. AIT invests in office and logistics properties in India. 

Lease Profile

Occupancy is high at 98%. WALE is short at 3.6 years. 45% of the lease would be expired in FY2024 and beyond, without a breakdown in detail. All of its income is in INR. All of its properties are freehold.

Debt Profile

Gearing ratio is low at 29%. Cost of debt is high at 5.7% which is normal for developing countries. Fixed-rate debt % is moderate at 82%. All of its debt is unsecured debt. Interest cover ratio is moderate at 4 times. WADE is slightly short at 2.6 years where the highest debt maturity of 30% falls in FY2022.

Diversification Profile

Top geographical contribution is low at 39%. This is the same for top property, however, 39% is considered high for top property. Top tenant contribution is low at 8.3% where top 10 tenants contribution is moderate at 36%

Key Financial Metrics

Property yield is high at 8.1%, which is normal for developing countries as cost of debt is high. Management fee is not competitive in which unitholders receive S$ 6.33 for every dollar paid. Distribution on capital is high at 4.9%. Distribution margin is moderate at 49.8%.

Related Parties Shareholding

As compared to SREITs median, manager is holding a higher stake where the sponsor and director of REIT manager are holding a lesser stake.


DPU and NAV per unit are on the uptrend. Distribution margin is low initially and drop to lowest in 2Q 2017, but it has improved gradually.

Relative Valuation

i) Average Dividend Yield  - Apply past 4 quarters DPU of 9.04 cents to average yield of 6.05% will get S$ 1.49. 

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

Author's Opinion

FavorableLess Favourable
100% Freehold PropertyIncome Received in INR
Gearing RatioCost of Debt
Unsecured DebtTop Property Weightage
Top Geographical WeightageManagement Fee
Top Tenant Weightage 
Property Yield 
DPU Uptrend 
NAV Uptrend 
Distribution Margin Uptrend

If one looks into AIT financial statement, you would notice both interest income and finance cost are significant. This is because of AIT employe the forward purchase contract in which AIT will fnd the properties construction and subsequently acquire the properties at reasonable valuations. AIT would secure loans and raise funds through bond or equity (incur finance cost) and those funds would subsequently go toward disbursements of construction funding (receive interest income). There are quite some numbers of pipelines under this forward purchase agreement, in which AURUM IT SEZ building 2 and Arshiya Panvel 7th warehouse are expected to complete by 2H 2020.

The above analysis information is extracted from SREITs Dashboard, you are welcome to use the information there for your analysis. You could also refer SREITs Data for an overview of Singapore REITs. If you like my sharing, please join the Facebook group - REIT Investing Community where you could read, share, and discuss REITs related topics. Please also invite your like-minded friends to the group.

*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 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.

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