Ascendas REIT no longer ‘undervalued'

SINGAPORE (July 11): Daiwa has downgraded Ascendas REIT (AREIT) to “hold” with a revised target price of $2.35 after the post-Brexit hunt for yield chased up its price.

Describing the REIT as “no longer undervalued”, Daiwa analyst David Lum has cut DPU forecasts by 5-8% for FY17-19 due to the loss of recurrent income from the REIT’s property divestments in China and slightly lower overall revenue forecast after updating each property’s gross revenue.

Lum also expects the remaining $286 million of exchangeable collateralised securities (ECS) to be converted by the ECS holders to units at an adjusted exchange price of $2.0187 before the end of FY17.

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