Ascendas REIT Can Offset Higher Utility Costs With Rent Growth -- Market Talk

Dow Jones2022-05-05

0454 GMT - Ascendas REIT should be able to offset higher utility costs with rental growth, RHB analyst Vijay Natarajan says in a research note. Utility costs for common areas borne by the Singapore-listed REIT, and not its tenants, account for 8% of its operating expenses, and Natarajan expects they will rise by 50% this year due to higher electricity tariffs. The higher costs could squeeze net property income margins, but that should be offset by higher rent growth, Natarajan reckons. The overall impact of the expense increase should be manageable, he says. RHB keeps a buy rating and S$3.60 target price on Ascendas, which was last S$2.81. RHB expects Ascendas's 2022 dividend yield at 5.7%. (yongchang.chin@wsj.com)

$(END)$ Dow Jones Newswires

May 05, 2022 00:55 ET (04:55 GMT)

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The overall impact of the expense increase should be manageable, he says. RHB keeps a buy rating and S$3.60 target price on Ascendas, which was last S$2.81. RHB expects Ascendas's 2022 dividend yield at 5.7%. 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