SINGAPORE (Jan 25): Jefferies is keeping its “buy” call on Ascendas India Trust (a-iTrust) with a target price of $1.20 amid continued distribution per unit (DPU) growth.
This comes after a-iTrust on Thursday declared DPU of 2.05 cents for the 3Q18/19 ended December, 25% higher than a year ago, despite an enlarged equity base.
See: Ascendas India Trust posts 25% growth in 3Q DPU to 2.05 cents
“Growth was driven by positive reversions, higher occupancy, new acquisitions and a one-off. Excluding the one-off, DPU grew 15% year-on-year,” says analyst Krishna Guha in a flash note on Thursday. “AIT has been and will continue to deliver DPU growth, in our view.”
According to Guha, the REIT plans to grow its net lettable area by 61% over the next 3-4 years as well as participate in new growth sector of logistics.
“Office leasing momentum is strong with the overall office market registering 10% annual growth,” Guha adds. “Combined with ongoing cap rate compression for office spaces and its new-found 'love' for sheds, AIT seems to be in a sweet spot.”
In addition, he notes that a-iTrust’s distribution yield, at 6.4%, is similar to its Singapore industrial peers.
As at 4.28pm, units in Ascendas India Trust are trading 1 cent higher at $1.09.