Ascendas India Trust Review @ 22 April 2021

Basic Profile & Key Statistics

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

Performance Highlight

Total property income and net property income (in SGD) decreased YoY by 7% and 1% respectively due to lower occupancy, lower utilities and carpark income as well as the increase in SGD/INR exchange rate.

Rental reversion is positive for all properties, despite a drop in occupancy rate.

AIT completed the acquisition of aVance6 and added 2 forward purchase arrangements for Industrial Facility in Chennai and IT parks in Bangalore. Another good news for DC fans, AIT is in the stage of acquiring land for greenfield data center development.

There are 5 developments that are expected to be completed by this year as well as newly added developments to be completed between 2023 to 2024.

Related Parties Shareholding

• REIT sponsor's shareholding is low at 21.58%
• REIT manager's shareholding is high at 5.59%
• Directors of REIT manager's shareholding is low at 0.07%

Lease Profile

• Occupancy is slightly low at 91%
• All income is received in India Rupee
• WALE is slightly short at 3.7 years
• Highest lease expiry within 5 years is high at 35% which falls in 2025 and beyond, without breakdown
• Most of the properties are freehold

Debt Profile

• Gearing ratio is slightly low at 34%
• Cost of debt is high at 5.2%
• Fixed rate debt % is moderate at 76%
• All debts are unsecured debts
• WADM is short at 2.12 years (estimated)
• Highest debt maturity within 5 years is low at 25.4% which falls in this year
• Interest coverage ratio is slightly high at 4.1 times

Diversification Profile

• Top geographical contribution is low at 37.5%
• Top property contribution is high at 37.5% 
• Top 5 properties contribution is high at 80.6% 
• Top tenant contribution is moderate at 10.5% 
• Top 10 tenants contribution is high at 40% 

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 high at 52.9%

Trends

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

Relative Valuation

• Dividend Yield - Past 4 quarters DPU @ 8.83 cents / average yield @ 5.95% = S$ 1.48
• Price/NAV - NAV @ S$ 1.08 x average P/NAV @ 1.31 = S$ 1.41

Author's Opinion

Favorable	Less Favorable
High Manager's Shareholding	Low Sponsor's Shareholding
Mostly Freehold Properties	Low Directors of REIT Manager's Shareholding
100% Unsecured Debt	All income is received in India Rupee
Well Spread Debt Maturity	High Cost of Debt
Low Top Geographical Contribution	Short WADE
High Property Yield	High Top Property & Top 5 Properties Contributions
High Distribution on Capital	High Top 10 Tenants Contribution
High Distribution Margin	Property Yield Downtrend
DPU Uptrend
Nav per Unit Uptrend
Interest Coverage Ratio Uptrend
Distribution Margin Uptrend

Occupancy is dropping since 2Q 2020 where the worst drop is from ITPC which contributes around 18% of the total property income. The SGD/INR exchange rate continues to increase, which is unfavorable to AIT as income is received in INR. Fortunately, AIT NPI growth is able to outpace the increase of the SGD/INR exchange rate and likely would continue due to its forward purchase pipelines. 

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support as a Patron and get SREITs Dashboard PDF or Data Excel

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

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 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.