a-iTrust – DBS

Growing Strongly

Comment on Results

A-iTrust reported a strong set of 3Q08 results. Gross revenue was up 60% yoy and 7% qoq to S$27.0m. The strong performance was attributable to strong rental renewals at 91% above preceding rates and completion of 2 buildings, Vega at V and Crest at ITPC which added 1.1m sf to portfolio. Net profit was up >100% to S$33.2m mainly due to revaluation gain of S$28.1m (net of deferred tax) on its Vega property.

Revaluation gain. More revaluation gains are expected in the pipeline in 4Q08 when the Crest obtains the necessary certification. Gearing at a low 4%, giving the trust ample borrowing capacity of S$550m for acquisitions up to management’s imposed limit of 60% gearing.

Recommendation

We are positive that A-iTrust is poised to benefit from India’s growth in the IT/ITES sector through having assets locations at key IT-related industry clusters in Hyderabad, Chennai and Bangalore. Therefore, A-itrust provides the opportunity for investors to ride the real estate up-cycle in India.

Strong sponsor support in terms of future acquisitions that will potentially grow A-iTrust’s portfolio by 85% through its 2 ROFR agreements with Ascendas Land International and Ascendas India Development Trust. We maintain BUY with TP S$1.84 based on DCF valuation.