a-iTrust – DBSV

Operationally stable

• DPU of 1.66 Scts (-19% yoy, -7% qoq)

• Operationally stable, development pipeline on track

• Lowered DPU estimates by 9-3% due to weaker Rs/S$ forex assumptions

• Maintain BUY with lowered TP of S$1.06 offers total return of 17%.

DPU of 1.66 Scts (-19% yoy. –7%qoq). Ascendas India Trust (a-itrust) reported steady performance with topline and NPI up 4% and 3% to S$30.9m and S$18.9m respectively. Distributable income was 19% lower yoy due to a one-off realized gain of S$4.1m a year ago vs a loss of S$0.7m in the current quarter.

Operationally stable, development pipeline on track. Occupancy remained stable at 97% while its 200,000 sqft of space were renewed at flat rates in the current quarter. Development pipeline remains on track for completion by the end of 2010 – Zenith (ITPC) and Park Square Mall (ITPB) expected to contribute 1.2m sqft of space (25%) earliest in 4Q11. Takeups are understood to be <20% currently but to pick up progressively as the building completes.

Adjusting estimates. We moderated our rental assumptions slightly for FY11 and reduce our INR-S$ assumptions from Rs32.5/S$ to Rs34/S$ in view of current hedging levels done for Nov’10 distributions. We keep our longer-term rates at Rs33.5/S$ in line with DBS Bank economists’ forecasts.

BUY, TP lowered to S$1.06 but still offers total return of 17%. A-itrust continues to offer a strong DPU growth of 13% with the completion of its development pipeline by yearend. Potential acquisitions could present upside earnings surprise. Key risks will lie on the forex fluctuations as its operations are based in India, while paying dividends in S$.