Ascendas India Trust: A Proxy For The Indian Growth Story?

Editor’s note: This article has been edited for factual errors as disclosed below. We apologized for our mistake.

India’s Gross Domestic Product or “GDP” for short has been rising at a fast clip over recent years. Most notably in the year ended 31 March 2016, GDP came in at 7.6% for the full year.

With such solid growth and good prospects, investors in Singapore might be interested in getting some exposure.

Ascendas India Trust (SGX: CY6U) is a Singapore-listed trust that debuted in 2007. It has six properties in the Indian states of Bangalore, Chennai and Hyderabad.

These three states are also known at the IT hubs of India. That is exactly the kind of industry that the trust hopes to capitalise on.

The REIT listed with 3.6million square feet (sq. ft.) of floor area. That has grown to 9.66 million sq. ft. implying a compounded annual growth rate (CAGR) of 12% over the past 9 years. In addition, the Trust has a pipeline that can grow the floor area up to 11.59 million sq. ft.

On the potential pipeline front, the Trust has a 408,000 sq. ft. of property currently under development which is expected to be completed in the latter half of 2017.

Moving to total and net property income growth, the Trust has grown total property income at a CAGR of 12%, since listing in rupee terms. In SGD terms total property income grew more modestly at a CAGR of 4%.

Similarly, net properly grew from INR 1.6 million 1.7 billion in 2007 to INR 4.4 million billion in 2016, representing a CAGR of 13%. Similar to Total Property income, in SGD terms CAGR was 6%.

From the figures, it seems that currency headwinds are a something to consider seriously. On this front, the Trust’s manager has currency hedges in place to ensure minimal impact from currency movements.

Other than the currency issues that the Trust might face, there could be a long road of growth ahead.

While the macro economic prospects look good for the country, it does not necessarily mean that the trust will be a direct beneficiary. As such, investors should use this rosy outlook just as a starting point to find out more about the Trust.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Esjay does not owns shares in Ascendas India Trust.