|08 March 2018|
|Ascendas-Singbridge Building Strengths & Deepening its Presence|
Ascendas-Singbridge was established through the merger between Ascendas and Singbridge in June 2015. With its subsidiaries, Ascendas-Singbridge is jointly owned by Temasek Holdings and JTC Corporation through a 51:49 partnership. The Group undertakes urbanisation development projects spanning commercial, hospitality and industrial assets in Asia Pacific.
As a developer and innovator of business space, Ascendas-Singbridge serves a global clientele of more than 2,600 customers. As of March 2017, the assets under management (AUM) of Ascendas-Singbridge stood at $22.4 billion, with a portfolio spanning 29 cities in 10 countries – Australia, China, India, Indonesia, Japan, Singapore, South Korea and Southeast Asia.
Data on its AUM and geographical presence is provided by the Ascendas-Singbridge FY17 Annual Report, which highlighted the Group’s objectives of deepening its presence, building on its strengths, enabling business growth and creating sustainable value (click here for more). AUM includes the management and sponsorship of three SGX-listed funds and a series of private real estate funds. The three listed trusts are expected to report their FY18 results between late April and mid-May.
The three SGX-listed trusts consist of a:
§ Real Estate Investment Trust (REIT) - Ascendas Real Estate Investment Trust (“A-REIT”);
§ Business Trust - Ascendas India Trust (“A-iTrust”) and
§ Stapled Trust - Ascendas Hospitality Trust (“A-HTRUST”).
Members of the Ascendas-Singbridge Group provide the management and sponsorship of these three trusts while maintaining unit holdings. Based on the FY17 Annual Reports, Ascendas-Singbridge maintained the following interests of the three trusts:
Ascendas-Singbridge Interests in Ascendas Trusts (%)
Aside from the trio of the Ascendas trusts, Temasek, through sponsor Mapletree Investments also maintained deemed interests in the Mapletree REITs as discussed here.
Ascendas Trusts Listed on SGX
A-REIT, A-iTrust and A-HTRUST listed on SGX between November 2002 and July 2012. The combined IPO market capitalisation of the three trusts upon their debut was S$2.1 billion. The combined market capitalisation has since grown 4.6 times to S$9.6 billion at present.
Of the three trusts, A-REIT has seen the greatest increase in market capitalisation, growing 15.8 times from its IPO market capitalisation of S$480 million to S$7.57 billion at present. Assuming that dividends were reinvested, A-REIT has generated a total return of 680.8% since it listed on SGX on November 2002.Annualised, this represents a 14.4% annualised total return.
The three trusts have averaged a 8.8% annualised return from their IPO dates as illustrated below.
Annualised Total Returns from IPO (%)
The performance of the trusts since their inception is tabled below. The table is sorted by current market capitalisation. Click on the stock name to see its profile in StockFacts.
Source: Bloomberg & SGX StockFacts (Data as of 7 March 2018)
The three stocks currently maintain an average dividend yield of 6.2%.
The shorter term performances of the stocks are tabled below. The three trusts averaged a total return of 25.8% in 2017.
Source: Bloomberg & SGX StockFacts (Data as of 7 March 2018)
As of 31 December 2017, A-REIT’s portfolio consisted of 101 properties in Singapore and 31 properties in Australia. A-REIT is expected to report its FY17/18 results towards the end of April. For its 3QFY17/18, A-REIT reported:
§ Net property income (“NPI”) increased by 1.7% YoY in the 3QFY17/18, lower than the increase in gross revenue due to the higher property operating expenses in 3QFY17/18 . This was attributed to 3QFY16/17 including a one-off property tax refund arising from retrospective downward revisions in the annual value of certain properties.
§ Excluding the aforementioned one-off property tax refund, 3QFY17/18 NPI would have increased by 4.7% YoY.
§ Key performance contributors for 3QFY17/18 included the new acquisitions of 12, 14 & 16 Science Park Drive (Singapore) and 100 Wickham Street (Brisbane, Australia) and the completed redevelopment of 50 Kallang Avenue (Singapore).
As a REIT governed by the Collective Investment Scheme, A-REIT maintains a leverage ratio 35.2%. A-REIT is managed by Ascendas Funds Management (S) Limited ("AFM"), a wholly-owned subsidiary of Ascendas-Singbridge Group. The trustee of A-REIT is HSBC Institutional Trust Services (Singapore) Limited.
A-REIT is a constituent of the Straits Times Index (STI) and the most recent A-REIT investor presentation can be found here.
Ascendas India Trust
A-iTrust owns seven IT parks and six modern warehouses in India with total floor area of 12.8 million square feet spread across Bangalore, Chennai, Hyderabad, Pune and Mumbai. Ascendas India Trust is focused on capitalising on the fast growing IT and logistics industries in India.
For its 3QFY17/18 A-iTrust reported NPI was 23% YoY due to revenue growing faster than expenses. Its NPI for the 9MFY17/18 increased 21% YoY.
As a Business Trust governed by the Business Trust Act, A-iTrust maintains a gearing ratio of 45.0%. The Trustee and Manager of A-iTrust is Ascendas Property Fund Trustee Pte. Ltd., a wholly-owned subsidiary of Ascendas Pte Ltd.
The most recent A-iTrust investor presentation can be found here.
Ascendas Hospitality Trust
A-HTRUST is a stapled group comprising Ascendas Hospitality Real Estate Investment Trust(“A-HREIT”) and Ascendas Hospitality Business Trust (“A-HBT”). A-HTRUST has an established presence in Asia Pacific with a portfolio of hotel properties which spreads across seven cities - Sydney, Melbourne, Brisbane, Beijing, Tokyo, Osaka and Singapore.
For its 3QFY17/18 A-HTRUST reported NPI declined by 4.7% YoY on the back of a weaker performance from the Australia portfolio, which was compounded by weakening of the Australian Dollar (“AUD”), Chinese Renminbi (“RMB”) and Japanese Yen (“JPY”) against the Singapore Dollar (“SGD”). Its NPI for the 9MFY17/18 decreased 1.9% YoY.
The managers announced on 29 January that A-HTRUST will be divesting the two hotels in Beijing and completion of the divestment is expected to take place in the first half of FY18/19.
As a Stapled Trust governed by both the Collective Investment Scheme and Business Trust Act, A-iTrust maintains a gearing ratio of 33.2%. The trustee-Manager of the Ascendas Hospitality Business Trust is Ascendas Hospitality Trust Management Pte. Ltd while the manager of the Ascendas Hospitality REIT is Ascendas Hospitality Fund Management Pte. Ltd, with Perpetual Asia Limited the trustee.
The most recent A-HTRUST investor presentation can be found here.
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