UOB Kay Hian analyst Jonathan Koh is upbeat on Ascott Residence Trust (ART) following its 3QFY2021 ended September business update released on Oct 29.
In a Nov 2 research note, Koh highlights that ART’s portfolio revenue per average unit (RevPAU) rebounded 8% q-o-q to $70 in 3QFY2021, driven by domestic leisure demand in markets such as Europe, the UK and the US.
“Japan also benefitted from group bookings during the Olympics Games,” he notes.
Koh points out that ART plans to increase its asset allocation to student accommodation and rental housing to between 15% to 20% of its portfolio.
During the first nine months of 2021, ART has acquired three student accommodation properties in the US (Georgia Institute of Technology, University of South Carolina and Texas Tech University) and three rental housing properties in Japan (Sapporo). “The allocation to these long-stay assets increased by six percetengae points year-to-date to 11% of portfolio value,” Koh says.
ART also recently announced the acquisition of a fourth student accommodation property in Illinois US for $82.3 million.
See: Ascott Residence Trust acquires fourth student accommodation in US for $US83.25 mil
In addition, ART’s maiden development project and co-living property, lyf one-north, is scheduled for soft opening in 4Q2021.
Koh has raised his FY2022 and FY2023 distribution per unit (DPU) forecast by 8% and 10% respectively to reflect a faster and stronger recovery from Japand and the US, as well as the contribution from the newly acquired student accommodation property in Illinois.
See also: RHB still upbeat on ST Engineering but trims target price by 2.3%
He maintains his “buy” rating for the counter with a higher target price of $1.20, up from $1.16 previously.
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As at 9.48am, units in ART are trading flat at $1.09.
Photo: ART
