How will Ascendas Reit mitigate rising interest rates? analyst explains

Its metrics are in the right direction and will outpace rising costs.

The Ascendas Reit has recently acquired two properties, which will boost its resilience and will help it outpace cost challenges, said analyst, RHB.

In a brokerage report, RHB was referring to Ascendas’ acquisitions of Philips APAC Centre and cold storage facility in 1 Buroh Lane.

“Overall [Ascendas] metrics are trending in the right direction, with higher occupancy and double-digit rental rate reversions (recorded in 2Q) – this is expected to continue in the second half and outpace cost pressures,” said RHB.

RHB even maintained that Ascendas Reit is its top stock for the property sector.

“The impact of rising interest rates on borrowing cost is manageable, at 2% down for every 100 basis points increase,” the analyst added.