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Ascendas Reit | Add (maintained) Target price: S$2.83 Jan 31 close: S$2.74 CGS-CIMB, Jan 30
Its Q3 2019 distribution per unit (DPU) of 3.998 Singapore cents (+0.7 per cent y-o-y) was in line at 24 per cent/25 per cent of ours and Bloomberg consensus full-year forecasts. The y-o-y improvement was largely due to contribution from new acquisitions in Australia and two UK portfolios.
Ascendas Reit secured a S$181.2 million development project for Grab's headquarters in Singapore. The 42,310 sq m property, located in one-north, will be fully leased by Grab to house all its Singapore-based employees. It will have a net profits interest yield of 6.4 per cent. The lease will run for 11 years with a renewal option of five years, and have built-in rental annual rental escalations. This will be the Reit's 17th development project and 3rd business park asset in one-north. Post-completion in Q4 2020, the Reit's business park segment will comprise 34 per cent of its portfolio.
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