Thanks to the consistent rise of property prices and rents in Singapore, real estate investment trust or REITs have long been seen as a safe bet.
Ascendas REIT is one of Singapore’s oldest and most popular REITs in the market. Together with its Indian counterpart Ascendas India Trust, also known as Ascendas-iTrust (also traded on SGX), Ascendas REIT gives you the chance to invest in business and industrial real estate with a strong focus on business parks and IT parks.
Disclaimer: This article contains information on Ascendas share prices as well as its recent performance trends. It is meant as a guide for readers only, not financial advice. Please practise your own discretion when making investment decisions.
Ascendas REIT (A17U) & iTrust (CY6U) overview
|Ascendas REIT (A17U)||Ascendas-iTrust (CY6U)|
|Sector||Real estate, commercial REITs||Real estate, commercial REITs|
|Year of incorporation||2002||2004|
|Total Market Cap||$10,203.29 million||$1,328.80 million|
|Historical share price||Steady growth over the past four years, reaching a peak of $3.45 at the beginning of March 2020 before falling due to Covid-19||Steady growth since November 2018, reaching a peak of $1.784 in Feb 2020 before falling due to Covid-19|
|Current share price||2.830||1.230|
|Current dividend yield||6.469%||5.405%|
Note: The figures are accurate at the time of writing (Apr 2020), but due to the nature of this industry, this information changes very frequently. For the latest updates, do check the Ascendas REIT (A17U) and Ascendas-iTrust (CY6U) SGX listings.
Ascendas Stock Profile: Share prices, dividends and more
Ascendas REIT is considered one of the biggest and “safest” REITs in Singapore with a market capitalisation of over $10 billion.
It is tracked by the Straits Times Index, as well as the Morgan Stanley Capital Internationl Index (MSCI), the EPRA/NAREIT Global Real Estate Index and the GPR Asia 250.
Ascendas REIT (A17U)
Ascenda’s REIT’s manager is wholly owned by mega real estate group CapitaLand. Having Temasek Holdings as its biggest shareholder also offers an added layer of security.
Ascendas REIT stocks have performed strongly for a long time, with very steady growth over the past four years that saw prices peaking at $3.45 at the beginning of March this year. It looks like stock prices would have climbed even higher had Covid-19 not hit.
However, after the number of imported Covid-19 cases started to explode in Singapore in March, stock prices fell sharply, reaching a low of $2.20. They have since rebounded somewhat to the $2.50 to $2.90 range.
Ascendas-iTrust, with a market capitalisation of $1.3 billion, can be a good complement to Ascendas REIT stocks as it takes advantage of India’s developing nation status to potentially enjoy more rapid growth potential.
This stock started to really take off in November 2018, with prices rising from below $1.10 to a peak of $1.784 in February 2020. Sadly, this meteoric rise has now turned to dust as Covid-19 sent prices plummeting to a low of $1 in March.
Both Ascendas REIT and Ascendas-iTrust have been paying out healthy dividends of 6.649% and 5.405% respectively.
About Ascendas: Market news and updates
Ascendas REIT gives you the chance to invest in the business and industrial property markets, with more than 106 properties in Singapore, as well as properties in Australia, China and the UK. They are currently Singapore’s biggest listed REIT in business and industrial real estate, and their portfolio is very diversified. So, as far as REITs go, this is widely considered as one of the safest.
Many of their business properties are in the R&D, science and engineering fields, so you’re looking at business park-type developments, in addition to the usual logistics and manufacturing industrial properties.
In 2018, Ascendas REIT made investments in logistics assets in the UK and Australia, which have served to further diversify its portfolio.
Ascendas-iTrust, on the other hand, gives you exposure to properties in India, mostly used as business parks or IT parks.
Ascendas REIT and Ascendas-iTrust’s biggest shareholder is government sovereign wealth fund Temasek Holdings, which has a 21% and 21.14% shareholding respectively.
In the grand scheme of things, I personally feel that Ascendas REIT is unlikely to go under. But in the short-term, things do not look good — the ill-timed investments in the UK and Australia are likely to underperform due to Covid-19.
In addition, the likelihood that Singapore will fall into a recession does not bode well, especially for the industrial properties in Ascendas’s portfolio.
As for Ascendas-iTrust, it has always been riskier than Ascendas REIT, but also offered greater growth potential. Right now, that could work against it as India struggles to limit the economic impact of Covid-19.
It is also doubtful as to whether both stocks will be able to maintain their current dividend growth. Ascendas REIT’s strong performance in 2018 and 2019 were partly due to rental support received from newly-acquired properties in Australia and the UK.
Given the fact that the UK especially has been very badly affected by Covid-19, these overseas properties might not be able to maintain Ascenda’s REIT’s income growth.
The outlook also looks grim for Ascendas-iTrust. The former’s portfolio is less diversified and the fallout for India due to Covid-19 looks set to be very serious. Part of the stock’s strong performance has been due to the strong Rupee, but Covid-19 might reverse that.
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