Ascendas REIT 2021 Revenue, Revenue Estimates Beaten – Earnings Review

By Yongchang Chin


Ascendas Real Estate Investment Trust reported better than expected revenue for 2021, helped by contributions from its newly acquired properties. Here’s what you need to know:


REVENUE FORECAST: Ascendas REIT’s 2021 revenue was S$1.23 billion (US$915.6 million), beating a consensus estimate compiled by FactSet of S$1.20 billion. This compares to a turnover of S$1.05 billion in 2020.


NET PROPERTY INCOME FORECAST: Ascendas posted net property income of S$920.8 million in 2021, which also exceeded a consensus estimate compiled by FactSet of S$907 million. The REIT had a net property income of S$776.2 million in the prior year.


WHAT WE WATCHED:

–CONTRIBUTIONS FROM ACQUISITIONS: Ascendas REIT said it made S$2.1 billion of new investments in 2021, bringing the size of its investment property portfolio to S$16.3 billion. Recent acquisitions include 11 logistics assets in Kansas City, US in October and a 75% stake in a business park in Singapore in May. The assets have inflated the net income from the property of the trust.

–STRONG OPERATIONAL MEASURES: Ascendas REIT posted strong operational metrics, with a portfolio occupancy of 93.2% at the end of December, compared to 91.7% in the quarter ended September. Rents rose by an average of 4.5% in 2021, he added.

–SCIENCE PARK REDEVELOPMENT COSTS: Ascendas announced plans in November to redevelop its Science Park property into a campus focused on life sciences. Brokerage RHB Research estimates development costs at S$883 million, which could imply a net property income return of 6.3% after completion. The REIT said it should be completed in 2025.

–INDUSTRIAL PROPERTY PORTFOLIO OUTLOOK: While Singapore’s gradual nationwide reopening amid the Covid-19 pandemic is a tailwind for operations, the uncertainties posed by the Omicron variant and the large supply of new industrial properties to be completed this year could put downward pressure on rental rates and occupancy levels, the REIT said.


Write to Yongchang Chin at [email protected]