CapitaLand Ascendas REIT (ACDSF – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst on February 2. Analyst Dale Lai from DBS maintained a Buy rating on the stock and has a S$3.25 price target.
Dale Lai has given his Buy rating due to a combination of factors pertaining to CapitaLand Ascendas REIT’s financial stability and growth prospects. Lai highlights that the REIT is attractively priced when compared to its peers, boasting an appealing yield of approximately 6.0%. This yield is notably higher amongst its large-cap industrial S-REIT counterparts, indicating that investors might be getting a good deal for their investment. Additionally, the REIT’s proactive strategy in improving and redeveloping older properties, along with its recent acquisitions, is expected to support a stable Distribution Per Unit (DPU) in the coming fiscal years.
Furthermore, Lai believes that CapitaLand Ascendas REIT is positioned to benefit from several structural tailwinds, including the rise of e-commerce, the demand for data centers, and trends in office decentralization. These factors are anticipated to drive long-term earnings and capital value growth. The REIT’s active management approach, particularly in enhancing the value of older properties and exploiting untapped plot ratios, is likely to result in additional earnings upside. Lai also notes the significant potential value from the redevelopment of science park assets, which could unlock considerable development value, bolstering the REIT’s financial prospects despite concerns over rising financing costs.
In another report released on February 2, CGS-CIMB also reiterated a Buy rating on the stock with a S$3.06 price target.
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CapitaLand Ascendas REIT (ACDSF) Company Description:
Ascendas Real Estate Investment Trust is a real estate investment trust focusing on the industrial and business space. Its property portfolio consists of 200 properties, including 35 properties in Australia, 38 properties in the U.K., and 28 properties in the U.S. The property types encompass business and science parks, high-specification industrial properties, data centres, light industrial properties, logistics and distribution centres, integrated development, amenities, and retail properties. The trust is externally managed by parent Ascendas Singbridge, which owns a 20% stake in the trust.
