Ascott serviced residences could bolster CapitaLand Ascott's fee income by 50%

The 75,000-unit serviced residence has 31,500 units in the pipeline.

CapitaLand seeks refuge from its fast-growing serviced residence, new malls and management contracts, as well as its fund management wing to fare well despite the impending backlash of the property curbs, RHB analyst Vijay Natarajan said.

Natarajan mentioned that its serviced residence Ascott has grown to about 75,000 units, out of which over 43,700 units accounted for a revenue of $43m in Q1, another 31,500 units are under development.

“When completed, they are likely to boost Ascott FY2017’s fee income by around 50% on a stabilised basis,” Natarajan commented.

Also read: CapitaLand poised to deflect new property measures' effects

“With new malls seeing strong pre-commitments ahead of completion, we believe that risks to Capitaland Mall Trust’s (CMT) earnings has also minimised,” DBS Equity Research noted.

Meanwhile, the firm’s income from real estate investment trusts (REITs) and fund management fees reached $57.8m in Q1.

In addition, CapitaLand has bought back 57.6m of own shares (1.4% of total) worth $208.8m YTD.

“We believe management is likely to continue with buyback plans in 2H18, as the share price is trading at a steep ~37% discount to revalued net assets value (RNAV). Natarajan said.