Ascendas REIT seen to post strong rent reversions well into FY14

But at a "more modest" clip.

Barclays Research reports that Ascendas REIT (AREIT) reported in line 2QFY14 DPU of 3.60cts with key positives in continued strong rent reversions across all its five segments, especially Business & Science Parks, stable occupancies and lower debt costs.

AREIT's portfolio continued to achieve positive rental reversion, averaging 10.8% for leases during 2QFY14, with Business & Science Parks post an impressive rent reversion of +15.2%.

"We expect this trend to continue for FY14, albeit at a more modest rate," said Barclays Research.

"Portfolio occupancy has been stable although management highlighted that occupancy in certain properties may soften from some tenants moving out. Gearing increased to 29.7% from 28.6% in June 2013, but the debt cost averaged down to 2.74% from 3.09% in June 2013 as it refinanced a MTN facility, which cost 5%, in July," the research firm added.

"We forecast decent FY14/15/16E DPU growth of 2%/6%/1%, buoyed by acquisitions and AEIs; and positive rent reversions as 10.5%/22.4%/18.4% of its FY14-16E revenues are up for renewal with current market rents at 11-41% higher than the weighted average expiring rent in FY14E," it said further.