Overv i ew
what af f ect s us
what we do
our p e r formance
note to unitholders
Dear Unitholders
We are pleased to report a 13%
growth in our distribution per unit for
the financial year ended 31
st
March
2016 (¡°FY15/16¡±). Favourable market
conditions and growth through recent
acquisitions contributed to our healthy
financial performance. We continue
to enjoy a strong reputation as a
premium space provider because of our
commitment to deliver quality business
space solutions to our customers. This
enabled us to achieve high occupancy
levels and good rental reversions.
India¡¯s economic outlook has improved
in the last three years. Prudent monetary
policies from the Reserve Bank of
India together with business friendly
reforms by the Indian Government have
stabilised the Indian economy and set
it on the path to growth recovery. The
International Monetary Fund estimates
that India¡¯s GDP grew by 7.3% in 2015
1
,
making India the fastest growing major
economy in the world. In 2015, a
record 41 million square feet of office
space was absorbed in the top seven
cities in India
2
. More than half of that
came from Bangalore, Chennai and
Hyderabad, cities which we operate in.
The brighter economic outlook in
India has attracted a number of private
equity and sovereign wealth funds to
increase their capital allocation into
Indian income producing office assets.
As a result, property prices in the market
have gone up. This is also reflected
in the uplift in our portfolio valuation,
which increased in Indian Rupee terms
by 23%
3
compared to a year ago, and
stood at 56 billion as at 31
st
March
2016. Recent changes to the Indian
tax laws have also made the listing of
Real Estate Investment Trusts (¡°REITs¡±)
a more feasible proposition for both
REIT sponsors and investors. Hence, the
competition for assets is likely to increase.
Our pipeline of projects remains
strong. Our multi-pronged strategy of
development, forward purchase and
market acquisitions will enable us to
continue to steadily grow our portfolio.
As at 31
st
March 2016, the Trust has
debt headroom of S$463 million to
acquire new assets. In Pune, our sponsor
Ascendas-Singbridge Group has provided
Ascendas India Trust with a right of
first refusal to acquire International
Tech Park Pune. This is an SEZ under
development with a total floor area
of 2.3 million square feet. In addition,
we will be acquiring a property named
BlueRidge 2 with over 1.5 million square
feet of floor area in Pune. We expect to
complete this acquisition by December
2016. In Hyderabad, we have signed a
forward purchase agreement to acquire
up to 2.4 million square feet in the
aVance Business Hub property and will
progressively buy up completed space.
In Chennai, we have recently acquired
the third building in CyberVale.
Besides acquiring completed properties,
we are also growing by developing
our extensive land bank. When fully
developed, our land bank will yield
additional floor area totalling 3.6 million
square feet. In Bangalore, a 0.6 million
square feet multi-tenanted building
named Victor is likely to be completed
by June 2016. Victor has been fully
committed to a mix of existing and new
tenants before completion. In Hyderabad,
we recently completed a new multi-level
car park to meet the demand for car
park space from our tenants. We are also
With the Indian commercial
market looking set
for stable growth, we
are confident that our
balanced strategy of
acquiring high-quality
commercial properties
and developing buildings
to cater to tenants¡¯
growth will provide our
Unitholders with attractive
and sustained returns.
1
Source: International Monetary Fund, World Economic Outlook Update, April 2016
2
Source: CBRE South Asia Pvt. Ltd.
3
Includes new acquisitions.
Philip Yeo,
Chairman
.4
ASCENDAS india trust ANNUAL REPORT
2015/2016
