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Ascendas REIT's UK foray presents a 'wealth of opportunities', says DBS

Michelle Zhu
Michelle Zhu7/27/2018 12:14 PM GMT+08  • 2 min read
Ascendas REIT's UK foray presents a 'wealth of opportunities', says DBS
SINGAPORE (July 27): DBS Vickers Securities is maintaining its “buy” call on Ascendas REIT (A-REIT) with an unchanged target price of $3 on news of the trust’s first foray into Europe with its plans to acquire a portfolio of 12 UK logistics properti
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SINGAPORE (July 27): DBS Vickers Securities is maintaining its “buy” call on Ascendas REIT (A-REIT) with an unchanged target price of $3 on news of the trust’s first foray into Europe with its plans to acquire a portfolio of 12 UK logistics properties for $373 million.

In a Friday report, analyst Derek Tan says he sees the acquisition move as one that presents a “wealth of opportunities” for A-REIT to add to its portfolio inorganically without taking on too much “country risk”, due to the depth of market as well as the UK’s good transparency and rule of law.

While Tan highlights that the post-cost yield of 5.22% appears to be “fairly tight” compared to secondary market transactions of about 6%, the analyst is of the view that the under-rented properties versus market rents suggests opportunities for upside in the longer term.

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