OCBC Report 22 Apr 14

KEY IDEA

Ascendas REIT: Expecting further upside
Ascendas REIT (A-REIT) reported 4QFY14 DPU of 3.55 S cents, up 16.0% YoY. This brings the full-year DPU to 14.24 S cents (+3.6%), largely in line with our expectation. For FY14, positive rental reversion averaging 14.8% was also achieved. Going forward, A-REIT guided that positive reversion in the mid-to-high single digit is still anticipated, given that passing rents are below market rates. A-REIT also announced two new asset enhancement initiatives (AEIs) this quarter, with the objective of maximising the plot ratio and improving the marketability of the properties. We also note that the acquisition of Kallang Ave development may happen soon as TOP is expected in 2QCY14. We roll our valuation to FY15, while tweaking our assumptions to factor in potentially higher operating costs. Our fair value now increases to S$2.45 from S$2.40 previously. Maintain BUY. (Kevin Tan)


MORE REPORTS

Mapletree Logistics Trust: Fundamentals remain resilient
Mapletree Logistics Trust (MLT) reported NPI of S$68.3m and distributable amount of S$46.3m for 4QFY14. This represents a growth of 4.3% and 10.1% YoY, respectively. DPU for the quarter came in at 1.89 S cents, up 9.2% YoY. For FY14, DPU totalled 7.35 S cents (+7.1%), which is largely consistent with our full-year DPU forecast of 7.26 S cents (consensus: 7.2 S cents). We note that portfolio occupancy was stable at 98.3% (98.4% in 3Q), while leases renewed or replaced during the year achieved rents 17% higher than the preceding contracted rates. Management expects the demand for logistics facilities in its markets to remain robust going forward, and will continue to focus on driving both organic and inorganic growth. We will be attending MLT’s analyst briefing later in the morning. For now, we place our S$1.06 fair value and Buy rating under review. (Kevin Tan)
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NEWS HEADLINES

- US stocks closed modestly higher Mon, helping the S&P 500 to extend its winning streak to the longest in six months.

- Sembcorp Industries is reactivating Sembcorp Properties to develop residential and commercial projects in its parks, starting with China.

- Transcu Group was heavily traded yesterday on news that it had moved ahead with plans for contractor Straits Construction to do a reverse takeover of the company.

- Mapletree Greater China Commercial Trust said its 4QFY14 DPU rose to 1.587 S cents, beating its own forecast by 15.9%.

- Food Empire Holdings warned that it expected a net loss for 1Q14, because of the unrest between Russia and Ukraine, two of the group's key markets.

- Grand Banks Yacht confirmed yesterday that it has sold a luxury yacht to David Loh, owner of local logistics company KME Transport and a resident of Sentosa Cove.