SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.
1. Ascendas Reit (A-Reit)
Broker: Maybank Kim Eng
A-Reit's FY2014 revenue grew 6.6 per cent year-on-year to $613.6 million, bolstered by rental income from The Galen, Nexus@one-north and A-REIT City@Jinqiao. Full-year distribution per unit (DPU) rose 3.6 per cent year-on-year to 14.24 cents.
Although A-Reit achieved 14.8 per cent positive rental reversion for leases renewed in FY2014, management expects the trend to moderate in FY2015, with demand slowing and new industrial space supply coming up. About 21.3 per cent of its property income is due for renewal this year.
According to A-Reit's interest rate sensitivity analysis, its DPU would decline about 1 per cent, or 0.16 cts, for every 0.05 percentage point increase in interest rates.
A-Reit still has $135.3 million worth of development and asset enhancement works, which are scheduled for completion in 2014-2015. We believe this would help buffer the downside risks should property prices be recalibrated due to the impending hike in interest rates. Management also announced redevelopment works for C&P Logistics Hub and Techlink/Techview, costing $61.9m.
Maintain Hold with a target price of $2.31 (previously $2.30).
2. Mapletree Logistics Trust (MLT)
MLT's fourth-quarter and full-year results were in line with consensus and our expectations, with this quarter's distribution per unit (DPU) accounting for 26 per cent of our full-year forecast and FY2014's DPU coming in at 102 per cent.
Revenue for the quarter grew by 5.7 per cent year-on-year, mainly due to new contributions from Singapore, Japan and Korea properties.
We maintain our Hold rating with a slightly higher target price of $1.13, as we raise FY2015-FY2016 DPU by about 2.5 per cent to reflect the slightly better-than-expected results.