Advantage of size underpins Ascendas REIT as market awaits data centre portfolio

The Edge Singapore
The Edge Singapore 2/5/2021 6:31 AM GMT+08  • 3 min read
Advantage of size underpins Ascendas REIT as market awaits data centre portfolio
Ascendas REIT announced a 0.9% y-o-y DPU decline in 2H2020 because of a larger unit base from fund raising.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Ascendas REIT’s DPU for the 2HFY2020 ended Dec 31, 2020, fell by 0.9% y-o-y to 7.418 cents and FY2020’s DPU fell by 6.1% to 14.688 cents largely because of a 13.6% rise in the number of units in FY2020 versus FY2019. The increase in the unit base was due to a private placement in November 2020, and a preferential equity fund raising in December 2020 which together raised $1.19 billion.

Out of the proceeds, $390.0 million was used to partially fund two office properties in San Francisco which together cost $768 million; $180 million part-funded a suburban office in Melbourne which cost $100.6 million, and a potential European acquisition; and approximately $614.0 million will partially fund the acquisition of a data centre portfolio in Europe.

According to a November announcement, these acquisitions would be between 2% and 2.5% accretive to DPU on a pro forma basis had they been completed in April 2019. The US portfolio would be just 0.85% accretive to DPU on the same basis. With loan-to-value ratios of around 50%, analysts have estimated that the data centre portfolio would cost between $1 billion and $1.2 billion. As at Dec 31, 2020, Ascendas REIT’s cost of debt fell to 2.7% from 2.9% as at June 30, 2020, and gearing fell to 32.8% as at Dec 31, 2020, from 36.1% as at June 30.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.