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Ascendas India Trust (a-iTrust) is an SGX-listed property trust that owns a portfolio of Indian IT and logistics parks with a total floor area of 13.1 million square feet spread across Bangalore, Chennai, Hyderabad, Pune and Mumbai. As of 31 March 2019, its portfolio was valued at S$1.72 billion. In this article, I’ll cover the Trust’s latest annual results, upcoming growth plans, and stock valuation.
Here are eight things to know about Ascendas India Trust before you invest:
1. a-iTrust currently owns seven IT parks and one logistics park in India:
|IT/Logistics Park||Valuation (S$ million)||Percentage of Total Portolio|
|International Tech Park Bangalore||640.9||33.4%|
|International Tech Park Chennai||363.9||19.0%|
|aVance Business Hub||198.9||10.4%|
Portfolio valuation grew sharply post-2014 when the Trust acquired and developed a higher number of properties within their IT/logistics parks:
|Property||Activity||IT/Logistics Park||Period||Floor area (million sq. ft.)|
|Cybervalue 1 & 2||Acquired||CyberVale (CV)||Mar 2015||0.6|
|aVance 3||Acquired||aVance Business Hub (aVance)||Jul 2015||0.7|
|Cybervale 3||Acquired||CyberVale (CV)||Mar 2016||0.3|
|Victor||Developed||International Tech Park Bangalore (ITPB)||Jun 2016||0.6|
|BlueRidge 2||Acquired||BlueRidge 2||Feb 2017||1.5|
|aVance 4||Acquired||aVance Business Hub (aVance)||Apr 2017||0.4|
|Atria||Developed||The V||Sep 2017||0.4|
|Arshiya||Acquired||Arshiya Warehouses||Feb 2018||0.8|
Along with a stronger Indian rupee, portfolio valuation more than doubled from S$869.0 million in 2014 to S$1.92 billion in 2019.
2. Distributable income has increased by a compound annual growth rate (CAGR) of 12.9% over the last five years, from S$41.5 million in 2014 to S$76.1 million in 2019. This growth mirrors the rise in portfolio valuation over the same period due to acquisitions and new developments.
3. As of 30 June 2019, a-iTrust has a gearing ratio of 33.1%. Its effective weighted average cost of debt is 6.2% and 84% of its debts are at fixed interest rates. Presently, 67% of debt is denominated in Indian rupees with the rest in Singapore dollars. Moving on, a-iTrust has a total debt headroom of S$510 million to invest in new properties or undertake development activities.
4. As of 30 June 2019, a-iTrust has a committed occupancy rate of 99.9% from a base of 343 tenants. It has a tenant retention rate of 73%. Its weighted average lease expiry is 4.3 years and 62% of its leases will start to expire only in FY2022 and beyond. Its top ten tenants currently contribute 33% of portfolio base rent:
5. a-iTrust has land banks in Bangalore, Hyderabad, and Chennai with a total development potential of 6.6 million square feet (excluding the recent completion of Anchor Building at ITPB in May 2019). Moving forward, the Trust has plans for the following acquisitions/developments:
Upon completion of the following development/acquisition activities listed above, a-iTrust’s portfolio would increase its total floor area from 13.1 million to 22.3 million square feet.
6. Ascendas-Singbridge has granted a-iTrust the first right to acquire International Tech Park Pune and any business park developments held under the Ascendas India Growth Programme. International Tech Park Pune is a business park with 1.9 million square feet of completed space and 400,000 square feet of space under development.
7. P/B ratio: As of 30 June 2019, a-iTrust has a net asset value per unit of S$1.27. Based on its unit price of $1.55 (as of 14 October 2019), its P/B ratio is 1.22 — above its ten-year average of 1.06.
8. Distribution yield: a-iTrust paid 7.33 cents in distribution per unit in its last financial year. Thus, its gross distribution yield is 4.73% — below its ten-year average of 6.13%.
Ascendas India Trust has delivered strong growth over the last five years as it rides on a wave of continued economic development in India. For investors looking for exposure to the Indian business economy, ai-Trust might interest them. The Trust also has a pipeline of growth initiatives over the next few years which would expand the size of its portfolio considerably.
However, ai-Trust is currently trading above its historical P/B average and offering a below average yield for an investment in an emerging market. For investors seeking better value and yield, they may prefer to wait for a more opportune time to invest in the Trust.