This trust still has plenty of room to grow in India

SINGAPORE (Oct 27): DBS Group Research is maintaining its “buy” rating on Ascendas India Trust with a higher target price of $1.13 despite declaring a 2Q DPU of 1.37 cents, unchanged from a year ago due to the depreciation of the IDR against the SGD.

DBS analysts Mervin Song and Derek Tan say DPU in line with expectations. DPU had in fact risen 6% in IDR terms, lifted by positive rental reversions and additional income from the newly acquired Cybervale Building 3 in Chennai and aVance Building 3 in Hyderabad. Occupancy across a-iTrust’s portfolio was also stable with overall occupancy at 97%, they added.

The trust manager is also anticipating a 12% to 20% positive rental reversion in Chennai, and a 5% increase in Hyderabad and Bangalore. Eight percent of the trust’s leases are up for renewal for the rest of the financial year to March, and another 30% expire in FY18. Of these, 64% and 42% of the leases expiring in FY17 and FY18 respectively are located in Chennai.

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