Ascendas REIT: Data-driven Targeting in a Digital Age
- Sean Lee
- Apr 29, 2021
- 22 min read
Updated: Aug 15, 2021
Summary
As one of Singapore’s REIT pioneers, Ascendas REIT is Singapore’s first and largest listed business space and industrial real estate investment trust. With a history of strong leadership, stable growth in Total Assets, Net Asset Value, Dividend Yield amongst others and alongside optimistic prospects for future growth, Ascendas REIT has cemented its position as a trusted blue-chip REIT in Singapore’s REIT sector. The product of a comprehensive, award-winning Investor Relations (IR) Program centred on transparency, consistency and clarity; Ascendas has provided investors, prospective and existing, robust and timely access to financial data and IR collaterals, such as annual/quarterly reports, on an orderly corporate webpage. However, as per many of its peers, Ascendas’s IR strategy remains relatively passive and arguably outdated, relying on traditional media channels, platforms and content mix for its ongoing IR programs. Taking a page from modern digital marketing and branding strategies while adhering to user/audience-centred methodologies, we aim to provide Ascendas REIT with recommendations, inclusive of Search Engine Optimization/Marketing (SEO/M), Organic and Paid Social Media/Influencer strategies, augmented by a more diverse and accessible content mix to bolster its audience targeting and outreach efforts.
Introduction: Ascendas REIT and Larger Markets
As a pioneering real estate investment trust (REIT) in the business and industrial space, Ascendas REIT has a storied history inclusive of its IPO in November 2002, undertaking Singapore’s first-ever S-REIT-led development projects with Cold Storage and Courts in Jan 2006. It held its first regulated AGM in Jan 2007, joined the FTSE Straits Times Index in Jun 2014, participated in a merger between Ascendas and SingBridge to form the Ascendas-Singbridge group in July 2015, all while winning numerous awards and accolades such as Best Investors Relations (IR), Best Corporate Governance, Best Disclosure and Transparency amongst others in 2013, 2015 and 2016. In July 2019, it was acquired by CapitaLand Group, propelling it to further growth. It is listed on several Indices and holds a well-diversified global portfolio of 96 properties in Singapore, 36 properties in Australia, 38 properties in the United Kingdom and 30 properties in the United States as of 31 December 2020, combined hosting a customer base of approximately 1,450 international and local companies from a wide range of industries and activities. The longevity of Ascendas could be attributed to its best-in-class ongoing IR programs, corporate governance, disclosure policies and management acumen. Currently valued at 12.26B in market cap and included in the iEdge S-REIT Leaders Index, it represents one of the leading S-REITs listed on SGX.
In assuming the role of Ascendas’s newly appointed IR Manager we seek to evaluate Ascendas’s current IR Program, seeking to improve access to said collaterals while engaging both retail and institutional investors. Additionally, we aim to develop new tools, derived from bottom-up research methodologies, to target and engage prospective and current investors. Borrowing from the fields of Digital, Influencer, and Social Media marketing, we will leverage strategies such as Content Partnerships and Search Engine Optimization/Marketing (SEO/M) to improve transparency and distribution of IR communications, in doing so reaching a wider, and possibly younger, audience base while shaping perceptions of investing into Ascendas’s S-REIT. Furthermore, we hope to also explore innovative tools such as mobile apps and more to improve data collection, audience targeting, and more to identify novel ways to create value (outside of price appreciation/dividend distributions) amongst existing shareholders.
Brief Valuation of Ascendas
Ascendas REIT is currently valued at 12.26B with 46.9% of shares held by 329 institutions[1], 0.00% by insiders, with its top-3 holders being Vanguard International Stock Index, DFA Investment Dimensions, Vanguard Tax Managed Fund[2]. Traditional measures of Ascendas REIT include a Beta of 0.36 and a P/E of 25.29. Traditional valuation metrics such as P/E ratio and EPS are lacking when estimating the value of a REIT, hence with reference to this source[3], the following will be utilized:
Dividends, Dividend Yields, and Capital Appreciation
Ascendas’s dividends distributions have fluctuated between SGD0.122 to SGD0.184 per share, while dividend yield ranges between 7.37% and 4.97% for 2015 to 2020. Besides experiencing a sharp 33.5% drop in distributions and yield between 2015 and 2016 followed by a recovery of 30.0% in dividends and a 22.1% in dividend yields for the years of 2016 to 2017. Distributions have been stable at SDG0.16 per share while Yields have formed a down-trending pattern, signifying that while share prices have appreciated by 29% since 2015, its dividends distributions have remained relatively unchanged.
Price to Net Asset Value(NAV)[4]
Price to NAV measures the degree to which a REIT’s current share price deviates from its NAV. As of 2 Feb, 2021 Ascendas scores a 1.44, deviating from an industry average of 0.95. This indicates that compared to its peers, Ascendas may be overvalued; a result of the demand caused by its popularity.
Gearing Ratio[5]
Gearing Ratio measures equity of capital to debt, this indicates how leveraged, and hence risky the entity is. As of Nov 21, 2020 Ascendas scored a healthy 34.9% under the industry average of 37.6%, indicating that Acenadas has avoided accumulating debt despite its steady growth.
Analysis: Overview of Ascendas IR program, collaterals website, and Investment Narrative
As a strong player in the industry, Ascendas has gained recognition for its corporate practices and IR program over the years. This is signalled by notable awards such as the Most Organised Investor Relations and Most Strategic Corporate Social Responsibility in 2020, the Best Annual Report in 2019. Ascendas has also proved to be successful in positioning itself as a sustainable company, with awards for sustainable practices since 2009. Most recently, Ascendas was awarded the runner-up of the Sustainability Award in the REITs and Business Trusts Category[6]. It is thus important to analyse the REIT’s current IR program and its collaterals, such as its annual reports, press releases and website. By doing so, we aim to provide objective and effective recommendations to push Ascendas into greater heights.
IR Policy[7]
Ascendas’s IR policy is shared on its website, where the management promises to provide timely, objective, clear and consistent information on the REIT’s strategies, goals, trends and financial data to investors and unitholders. The IR policy also details the communication channels, namely via analyst/media briefings with live webcasts available on the website, meetings, conferences, investor luncheons, roadshows, property visits, AGMs and EGMs. Other channels include the dissemination of information via its corporate website, annual reports and press releases.
Website (Investor Relations)
The IR section of Ascendas’s website is comprehensively designed with clear and easy navigation for its users. The Financial Information section encompasses pages that are very informative for investors, which are Financial Results, Historical Performance, Event Calendar, Distribution, Unitholding Summary and Download Centre[8].
The Event Calendar shows past events that happened for Ascendas, such as the announcement of results briefings and the completion of private placements. However, the calendar is limited to a short time frame (approximately 6 months). Thus, it would be useful to increase the timeframe in the calendar from 6 to 12 months instead, which allows investors to look back to the previous year. In the Distribution page, investors get a clear glimpse into the distribution per unit for every quarter in a financial year. The page is detailed to the extent where it also specifies the payment date for each distribution. Further, the Download Centre allows investors to download multiple files in a zip folder. This is very useful for investors looking to download a few reports at once.
Another noteworthy aspect of Ascendas’s website is the transparency of disclosure in the Announcements page. In the announcements, Ascendas pre-empted investors about its request for a trading halt on Nov 10, 2020 and subsequently informed them when the trading halt was lifted the next day, such transparent dissemination of information illustrates effective shareholder communications. However, the classification of Announcements under the News section could potentially be confusing for users, who may associate the section with media news instead. As such, it is recommended that Ascendas rename the entire News section as ‘Announcements’ instead.
Overall, the website of Ascendas is comprehensively built. It also allows investors to access recordings of past meetings and Q&A sessions. Besides making minor improvements to the abovementioned pages and tweaking the website layout, Ascendas’s website is largely informative and visually appealing to investors.
Annual Reports
As of March 2021, Ascendas has not released its FY2020 annual report. Overall, Ascendas’s FY2019 annual report is aesthetically pleasing - an improvement from the reports published in the years before. The text-heavy report is complemented with photos to not only break the monotony but also to present its properties around the four countries. Other graphic elements, such as graphs, charts and tables are effectively used to consolidate huge pieces of information into a format that is easy to follow. However, the initial impressive design is quickly reduced into monochrome spreads in the Corporate Governance and Financial Statements section, leaving a jarring impression on readers. This is an area of improvement that Ascendas could work on to push its reports to the next level.
The FY2019 annual report consists of 268 pages and it provided a breakdown of the IR activities conducted during the financial year via a timeline. The IR activity of Ascendas was robust in FY2019, the team met with more than 300 investors and analysts in that year. This was achieved with 4 conferences, 3 luncheons and 1 forum, which included the annual REITs Symposium that was jointly organised by Shareinvestor and the REIT Association of Singapore (REITAS) in May 2019. Nonetheless, the breakdown of IR activities was lacking because it did not detail the investor meetings held. Information such as the number of meetings and when they were held are information that is not available in Ascendas’s report even though they are being reported by competitors such as Frasers Logistics and Commercial Trust.
Since the report for FY2019 was only published on 13 April 2020, Ascendas briefly addressed the issue of the Covid-19 pandemic as part of the REIT’s future outlook. The management also assured investors that a “business continuity plan is in place and is reviewed and tested regularly to minimise the impact of potential operational disruptions to critical business activities during catastrophic events, including epidemic outbreaks such as the Covid-19.”
Integrated Sustainability Report (ISR)[9]
Unlike other REITs in the industry, Ascendas separates its sustainability section from the annual report. The report’s purpose is to provide updates on Ascendas’s employee, environmental, social and governance (EESG) performance. It is effective in consolidating all of the REIT’s latest initiatives. The ISR reiterates the REIT’s dedication to environmental sustainability through various key messages. This dedication is recognised by the Securities Investors Association (Singapore) in FY2019, which awarded Ascendas with the runner up Award for Sustainability in the REITs and Business Trusts category. With this report, investors could easily review the efforts carried out by Ascendas over the past financial year, such as efforts to install rooftop solar panels and Electric Vehicle charging lots on various properties.
Further, the report also informs investors on the Sustainability Management Structure of CapitaLand, which also oversees the sustainability functions in Ascendas. The report is also accompanied by many engaging infographics. However, there are repetitions and misclassifications of the content in both the ISR and Annual Report, such as IR efforts and stakeholder engagement are those that should be included in the Annual Report. By splitting such content into two different reports, investors may miss out on certain information when they do not read both.
News releases[10]
The press releases by Ascendas are published under the ‘News’ section of its website. This page allows readers to search for press releases according to specific keywords, and allows filtering of the press releases by year. However, the press releases do not contain the important key messages for the media to take note of. Instead, it jumps into the body paragraph after the headlines. One improvement for Ascendas is to include the key messages after the headlines so that journalists would be more inclined to read on.
Analyst Coverage[11]
Based on the Analyst Coverage tab on their webpage and in the spirit of transparency, this page provides an overview of the Analyst’s name, Contact, Research House, Report Date, Recommendations, and Target price. With a total of 21 analysts actively covering Ascendas REIT, of which includes 11 ‘Buy’, 4 ’Neutral’, 2 ‘Add’, 1 ’Overweight’, 1 ’Underweight’, and 2 ‘Outperform’ calls with a mean target price of SGD3.48 per share, well about the current price of SGD3.05 per share. With the majority of reports being issued around Ascendas’s Q1 reporting date, the recency of the report and their overall favourable price target and recommendations illustrates that ongoing efforts to engage analysts have been successful, thus beneficial to both Ascendas and its shareholders.
Corporate Governance[12]
Shareholding Structure
Ascendas has issued 13,554,225 shares over the past 52 weeks and consists of 3,618,187,918 units that are spread across the four countries that it operates in. It also established voting rights as one vote per unit owned by the Unitholders. Citibank Nominees Singapore Pte. Ltd. is the biggest Unitholder, holding 23.40% of Ascendas’s units in FY2019. Other major Unitholders are DBS Nominees (Private) Limited and CapitaLand Singapore (BP&C) Pte. Ltd, each holding 19.71% and 16.58% of the units respectively.
Board and Management
Ascendas’s strength lies in competent and transparent leadership and management. The Board consists of 6 Independent Directors (ID) and 3 Non-Independent Directors (Non-ID) led by ID, Mr Lim Hock San. The Board has 2 different committees, the Audit and Risk Committee (ARC) and Investment Committee (IC) with the third Nominating and Remuneration Committee (NRC) dissolved on 1 February 2020. The Board now undertakes all the responsibilities for approving the appointment of directors and key management personnel. The ARC consists of 4 IDs and 1 Non-ID, which oversees the financial reporting progress, risk management and internal controls system, internet and external audit processes, and management of compliance with various policies. On the other hand, the IC consists of 2 IDs and 3 Non-IDs. The IC assists the Board in overseeing areas of investment, divestment and asset enhancement initiatives.
As the majority of the directors are independent, the company may be able to pursue their goals effectively because they are not able to influence each other’s decision on the Board. Additionally, a focus on diversity has led the Board to adopt a Board Diversity Policy in 2019, so that each director could contribute to the Board, fostering constructive discussions while preventing groupthink.
Social Responsibility
Ascendas is committed to minimising its environmental impacts by continuously improving its properties to reduce their carbon footprint. The steps that Ascendas take in its sustainability practices are detailed in its Integrated Sustainability Reports.
Engaging Retail Investors: Profile of REIT investors
A bottom-up methodology is employed to create a persona of investors considering investing in REITs. This method is informed by SEO practices, where key terms are used to test the topic(s) deemed most salient, as per the Search Engine Results Page(SERP). These tests allow for both insight into the thought processes and considerations of investors based on their position in the decision funnel (i.e. exploratory, comparison, confirmatory searches), while also ‘triangulating’ these themes and codified search terms through examination of the topics that financial bloggers tend to create content around for the very same audiences.
Google searches were done using private search mode to prevent our personal web browsing history and cookies from affecting the results obtained in this analysis. We came up with a few search terms and questions across exploratory, comparison, confirmatory slants that our persona would likely use as per personal decision funnels. Afterwards, we selected the top three relevant search results that appeared for each query. Thereafter, we analysed how often Ascendas appeared in these generalised searches. This methodology also sheds light on the criteria that both investors and financial bloggers are looking out for selecting a REIT to invest in.
“Why should we invest in REITs?”
SingSaver: High dividend yield of REITs enable investors to generate income and diversify their investment portfolio. REITs are also attractive for their affordability and liquidity.
MoneySmart: Investors should invest in REITs because of the high yield as compared to other stocks.
New Academy of Finance: REITs offer investors low effort in generating rental income because of their high yield and stable bond-like cash flow. They also allow investors to diversify their portfolio to reduce risk, increase long-term returns, and provide a natural hedge against inflations.
“Which REIT should I invest in” or “REITs to invest in”
MoneySmart: Sector that the REIT operates in, whether it is well-managed, yield, debt-to-equity ratio, price-to-book-value ratio.
SingSaver: Sector that the REIT operates in, yield, quality and occupancy rate of properties.
DrWealth: Lower gearing, lower PE ratio, lower volatility.
“Top REITs in Singapore”, “Best REIT in Singapore”
MoneySmart: Cited Ascendas as one of the Top S-REITs because of its huge market capitalisation. However, market capitalisation is not an indicator of a REIT’s performance.
New Academy of Finance: Did not cite Ascendas as one of the best performing REITs in 2020 but speculates that it would do “relatively well” in 2021.
Dollars and Sense: Did not cite Ascendas as one of the four best performing REITs in 2020, but listed Frasers Logistics & Commercial Trust and Mapletree Logistics Trust.
“Best performing REIT”, “REITs with best dividend”
The Smart Investor: Listed Frasers Logistics & Commercial Trust, Mapletree Logistics Trust and Mapletree Industrial Trust as the best REITs because they “outperform their peers while delivering double-digit returns to unitholders.”
“Is Ascendas REIT good?”
Sg Stock Market Investor: Acknowledges that Ascendas has a well-diversified portfolio and a strong and healthy balance sheet. However, it notes that the REIT has the highest cost of debt as compared to its competitors. Moreover, Ascendas is an industrial REIT, making it relatively safe from the impacts that Covid-19 pandemic has on the other industries.
IG: States that Ascendas was facing downside pressure around late 2020, where share price hit its lowest (in three months) of $3.21 in September. Despite this, several financial analysts think that Ascendas is a firm “Buy”.
The Smart Investor: Compares Mapletree Industrial Trust with Ascendas REIT. MIT surpasses Ascendas in terms of its financial performance, financial indicators and operating metrics. However, Ascendas provides better dividend yield.
From the analysis, it is apparent that investors are looking for a stable flow of income with high dividend and liquidity that REITs can offer. Investors first consider the sector each REITs operates in, thereafter, the top criteria when choosing one to invest in are: high dividend yield, good quality of properties, high occupancy rate and lower gearing ratio. Ascendas’s high dividend distribution is thus an attractive factor for both prospective investors.[2] [3] This also applies to current investors, who would have enjoyed a capital appreciation of approximately 23% on their principle if the shares were purchased around late 2015. However as a high Price to NAV of 1.44 signals overvaluation of Acendas’s shares this disincentivize new investors looking for attractive dividend yields in their investments.
The REIT landscape and Competitors
The analysis of Ascendas’s landscape and competitors is based on the SGX iEdge S-REIT Leaders Index[13], which tracks the performance of top S-REITS. The index has generated Principal Returns (PR) of 6.06% over a 5 year period, and save for a sharp drawdown in March 2019, has quickly recovered and has been steadily approaching previously set highs. With Ascendas having generated a benchmark-beat PR of 23% over the same 5-year period and being weighed at 8.81% of the index, its strong historical performance is in line with the wider performance of industrial REITS as a whole; for the recent pandemic has adversely impacted the retail sector while hastening the rise of e-commerce and digitization, as a result, Industrial and Logistics REITs stand to benefit from this paradigm shift. Similarly, large-cap REITs such as Mapletree Logistics, Mapletree Industrials, and Frasers Logistics and Commercial Trust have been amongst the top performers of 2020, generating PR of 70.3%, 100.1% and 48.1% respectively over the same 5 year period and each S-REIT similarly weighted at 9.53%, 8.83% and 5.99% in the same index. With the strong performance of competitors within the Industrial and Logistics sector, a comparison between the IR programs of its peers would aid in benchmarking the efficacy of Ascendas IR efforts, informing how it could better capitalize on a positive sector outlook to attract new investments. As per google search trends[14] Ascendas has comfortably led the pack in both share of voice and overall online presence, however, even Ascendas would benefit from an analysis of competitor’s IR programs. Competitor metrics will be attached in Appendix A.
Mapletree, like Ascendas and its parent company, leads in size, popularity and recognition in the REIT space, which is also reflected in a Price to NAV of >1.00%. The Mapletree IR program, while sufficient, pales in compression to Ascendas’s own. Beginning with the websites, that despite fulfilling the disclosure requirements with similar IR collaterals, falls short in both the granularity of data and design of the site. Due to its use of simplistic and old-fashioned styling, such as opting not to fill the entire browser window, it results in a lackluster user experience for visitors. Although displaying coverage by 17 analysts, it does not include information such as the analyst recommendations, target price and report date amongst others. Despite well-designed IR collaterals, it does not include webcasts of its AGMs. Although maintaining a presence on Linkedin, links to its socials are not present on its website.
Despite an outdated owned IR program, Mapletree, by virtue of its size and strong financial performance, has, like Ascendas, attracted copious amounts of coverage amongst financial bloggers, news media and forums. Coverage has been overwhelmingly positive based on its performance in 2020, with many tacitly recommending a ‘buy’ call on the basis of its potential for future growth in the expanding industrial and logistics sector. However, with a Price to NAV of 1.64 and 1.79, for its logistics and industrial REIT respectively, there are concerns towards shares being overpriced.
AIMS APAC’s relatively modern website provides a standard suite of disclosures of annual, quarterly and sustainability reports, factsheets and so on. Despite not having webcasts but meeting minutes instead, it hosts innovative features on its site, such as an investment calculator[18] that helps visitors project principal appreciation as well as email alerts that help keep investors updated on corporate developments. With only 4 analysts covering AIM APAC of which further details are not displayed on site, and a relatively weak social presence on Linkedin and Youtube, its coverage by financial bloggers/influencers stems from the fact it's currently viewed as a strong buying opportunity.
Frasers’s IR collaterals are relatively well designed. Its website is easy to navigate, on top of sections that contain important information to investors, it also includes a user-friendly search feature that allows investors to jump to specific IR publications based on keywords. Its annual reports and presentation slides are well-designed with compelling images and graphics such as graphs and charts to attract readers’ attention. One notable feature of the website is it's “Our Culture” page, which adds a human touch to Frasers Property. Frasers positions itself as a company that is driven by its beliefs and values – being collaborative, respectful, progressive and real. It also shares that the REIT focuses on developing its employees to be forward-thinking so that they are able to face “today’s needs and tomorrow’s challenges”. Although such information does not pertain to its financials, such embellishments may improve overall messaging and thus investors’ perceptions towards the REIT.
In terms of analyst coverage, Frasers is lacking as compared to Ascendas with only 11 analysts. Like Mapletree Logistics and Mapletree Industrial, Frasers does not include key information such as the analyst’s recommendations, target price and report date. As such, it is hard to fully ascertain what analysts think of it. Media coverage, however, shows mixed sentiments from financial bloggers. Some such as My Sweet Retirement think that Frasers has brought value to its investors, while others such as Seedly advise against investing in Frasers due to its lack of growth in DPU since its listing.
Recommendations: Increasing access and expanding brand image
With Ascendas’s ongoing corporate governance, IR programs and collaterals being best-in-class in terms of its transparency, disclosure, and treatment of shareholders, alongside its position as an established REIT with strong leadership and consistent dividend distributions; Ascendas has led the pack by being an S-REIT that its peers model themselves after. Given its precedent as a pioneer, we seek here to offer recommendations that expands upon the channels and strategies for the IR toolkit of S-REITs, for it is only by innovating on such fronts, incorporating strategies used in Digital Marketing and Human-Centered Design, would Ascendas then be able to expand upon brand associations, leveraging improved accessibility and visibility of relevant information to persuade prospective shareholders – and a growing number of young and first-time investors – of its viability as a long-term investment. All of these are done to convey Ascendas as a low-risk, stable investment and attractive dividend yield, holding a powerful position in the industrial sector that remains relatively safe during the COVID-19 pandemic, and one that continuously grows and improves its properties to attract and retain its occupants.
A Digital Strategy: SERP, Search Engine Optimization/Marketing, Financial Bloggers & other Influencers
One area Ascendas has yet to explore would be the fields of digital marketing, and Search Engine Optimization/Marketing. However, this is likely attributed to either its shares being a tradable asset and are hence liable to strict advertising/marketing regulations or such practices are frowned upon in its industry. Hence, to sidestep such legal pitfalls, it has to work through intermediaries to amplify its message for its audiences.
Adopting a data-driven approach, Ascendas could, with relevant agencies, conduct an audit of both its webpage and socials. This is to identify weakness in its existing strategy and discern the keywords and motivations of its audiences for not only visiting owned collaterals but their earned ones, inclusive of the content on Ascendas written up by financial bloggers, analysts and news media alike. This helps to create an aggregate audience persona for more effective targeting. However, to increase credibility while tacitly gaining their endorsement of said messages, Ascendas could look to engage financial bloggers and other opinion leaders to ‘speak on their behalf’.
Having spent the time to grow their following, reputation, and credibility, IROs could engage these bloggers and opinion leaders to learn more about their content and audiences collecting their unique views on their shared audience base. With a multitude of perspectives, Ascendas can better frame its value proposition as an investment by amplifying its existing strengths, strong track record, reliable leadership, numerous awards, low-risk and well-diversified portfolio and relating them to a COVID-induced uncertainty for the wider REIT sector. If done successfully, the forthcoming content will not only gain widespread distribution among its relevant audiences, but also add to the backlinking strategy of Ascendas, which creates more inbound channels to their website where they can learn more and possibly come to a decision to invest in Ascendas.
Updated Content Mix, Thought leadership, and more
Notably more modern when compared to its peers, Ascendas’s inclusion of webcasts on its website is, although forward-looking, still lacking a holistic and diverse content mix. Hence to increase access and diversity of its communications, Ascendas could consider both having a specific ‘Media’ page on its website while incorporating more videos in its site design. Example being, the image slideshow on its homepage could be replaced with its corporate video rather than relegating it to an easily-missed weblink[20].
On top of more interactive content such Q&As on its social media channels, Ascendas can leverage its credibility to engage in thought leadership activities such as market commentary, interviews with industry experts alongside internal and external leadership roundtables to build on its authority on the developments of its respective sector portfolio. Example being, commenting on its recent acquisition of data centres[21] and what that entails for a shift to cloud computing and an increasingly digital world. Occasionally exclusive leadership interviews with/by financial bloggers/opinion leaders on a wide variety of topics, even beyond Ascendas portfolio could also expand the reach of its brand name and improve the diversity of its brand associations.
A Distinct Social Media Strategy
Ascendas should make better use of various social media platforms to engage with its investors and other stakeholders. With more companies adopting digital marketing and communicating with stakeholders online, it is no surprise that investors are increasingly going on social media to conduct research before making investment decisions. Developing IR through social media would allow Ascendas to foster two-way communication with its stakeholders, and provide organisational updates more effectively.
Currently, Ascendas REIT provides links to CapitaLand’s social media accounts on its website. This is a move that came after CapitaLand’s acquisition of Ascendas-Singbridge in 2019, where Ascendas ceased its use of its own social media accounts thereafter. On the other hand, Ascendas India REIT has its own Linkedin account, albeit with low following. This is an ineffective way of using social media because Ascendas’s social media accounts could be used to communicate with their own investors instead of CapitaLand’s.
We recommend that Ascendas manages its own social media accounts to communicate directly with investors. This includes the use of Facebook, Linkedin, Twitter and Youtube. In recent years, Twitter has been recognized in the United States as a legitimate and regulated IR channel. Firstly, there should be a separate Twitter for the IR department to communicate with investors. This account should be verified and made official so that investors would see the information source as authentic. Secondly, legal disclaimers should be made on the Twitter account. There should be a concise disclaimer in the bio that links investors to the full disclaimer drafted by the Legal team.
Another recommendation is to use the social media platforms as a Q&A opportunity, where Ascendas could answer questions that investors have. Another way of doing this is to post the most common questions that the management frequently receives. Such information could be pinned as tweets on Twitter, for instance, or pinning it as a post on Facebook.
Website Optimisations
In terms of the improvements that could be made to the corporate website, Ascendas should work towards improving its user browsing experience. Currently, Ascendas is using tracking cookies on its website, which can be further leveraged on. For one, tracking cookies could be employed to identify first-time visitors to the website, who are then directed to a separate landing site or chatbot that assists and directs them relevant information. For instance, visitors who are unfamiliar with the website could utilise these functions to quickly get to the page that they are looking for.
Another use of tracking cookies is ad targeting is to promote Ascendas’s social media accounts as recommended pages on the various platforms. This ties in together with the recommendations for social media as mentioned above. With new social media accounts being set up, it is important to raise awareness and increase the following for effective IR communication. However, there may be regulatory pitfalls when it comes to ad targeting due to MAS regulations against corporate disclosure practices. As such, the ad targeting is not so much of promoting the shares of enticing investors with pretty numbers, but rather to increase the traffic flow to its website and social media accounts.
Additionally, Ascendas could consider conducting experiments such as quantitative eye tracking and reviewing users’ aggregated browsing habits to find out how users behave on its website. By doing so, specific improvements can then be made to the website. For instance, the time spent on each page and a user’s eye movements could inform on ways to rearrange certain elements on a page.
Conclusion & Limitations
Being a key player in the REITs industry, Ascendas has established a strong presence with an extensive award-winning IR program that has successfully maintained high levels of coverage/interest amongst analysts, media and financial influencers. As such, our recommendations focus on innovating on current IR practices to not only modernize and augment its already outstanding standard IR program but also leverage strategies and tools deployed in the fields of user experience/web design, digital, social media, and influencer marketing. Other than minor improvements to its current IR collaterals, true value lies in an expansion into digital strategies for investor engagement such as updating the content mix, engaging more financial influencers, improving its social media presence, optimising its website and more. In establishing a stronger online presence and recognizing the power of unexplored/unconventional media channels, Ascendas, in line with its pedigree as a pioneer, can spearhead the use of novel strategies that increase the distribution and access of its communications to a larger, more diverse, and possibly younger audience. However, we recognize the possibility of regulatory pitfalls that have not only dissuaded such strategies from being employed but will inadvertently come to hinder its implementation, impeding the extent to which these recommendations can be acted on. Despite this, we believe that with caution, these recommendations would only serve to benefit Ascendas, positioning it as a first-mover in innovating on standard IR practices, ultimately, redefining the parameters of an effective IR program.
Appendix A – Competitor Financial Metrics
With a Market Cap of 8.31B, 0.42% by insiders, 53.08% of shares held by 261 institutions, priced at SGD1.94 a share, gearing ratio of 39.5%, Price to NAV of 1.64, and 5-year average of Dividend/Dividend Yield per share of 0.0783 and 5.96% for its Logistics REIT[22] and With a Market Cap of 6.47B, 0.26% by insiders, 58.06% of shares held by 176 institutions, priced at SGD2.75 a share, gearing ratio of 38.1%, Price to NAV of 1.78, and 5-year average of Dividend/Dividend Yield per share of 0.1166 and 5.93% for its Industrial REIT[23]. Logistics REIT Source, Industrial REIT Source.
An Industrial REIT with a Market Cap of 833.04M, 16.33% of shares held by by 59 institutions[24], 35.56% of shares held by insiders, priced at SGD1.31 a share, gearing ratio of 33.6%, Price to NAV of 0.90, and 5-year average of Dividend/Dividend Yield per share of 0.1037 and 7.428%. AIMS APAC REIT punches above its weight, despite its relatively small market cap, its favourable gearing ratios, dividend yield and below average Price to NAV suggests a strong buying opportunity. Source.
As a competitor in the logistics and industrial sector, Frasers has a Market Cap of 4.72B with 19.47% of shares held by 134 institutions and 25.55% of shares held by insiders. Its shares are priced at SGD1.450, and have gearing ratio of 37.4%, Price to NAV of 1.17, and 3-year average of Dividend/Dividend Yield per share of 0.0708 and 6.358%. Frasers Logistics & Commercial Trust, despite its recent inception has, by virtue of the Frasers brand, secured relative popularity amongst its peers. Source.
[1] Source: Yahoo Finance [2] Weighting of Funds: 1.18%, 0.89%, 0.54% of shares respectively. [3] Singapore REIT Fundamental Analysis Comparison Table Nov 22 – 2020 [4] Singapore REIT Fundamental Analysis Comparison Table Nov 22 – 2020 [5] See above source [6] Ascendas Awards & Accolades [7] Ascendas IR policy [8] Ascendas Investor Relations [9] Ascendas Sustainability [10] Ascendas Newsroom [11] Ascendas Research Information [12] Ascendas Corporate Governance [13] Source: Edge S-REIT Index/S-REIT leaders Index Factsheet [14] Google Search Trends of Ascendas and its competitors [15] Mapletree Logistics Trust Homepage [16] Mapletree Industrial Trust Homepage [17] AIMS APAC REIT Homepage [18] AIMS APAC Investment Calculator [19] Frasers Logistics & Commercial Trust Homepage [20] Ascendas Homepage [21] Ascendas Reit Completes Acquisition Of A Portfolio Of 11 Data Centres In Europe [22] Top 3 institutional shareholder include: holding being Vanguard International Stock Index at 1.02%, DFA Investment Dimensions at 0.74%, Vanguard Tax Managed Fund at 0.44% [23] Top 3 institutional shareholder include: holding being Vanguard International Stock Index at 0.97%, DFA Investment Dimensions at 0.71%, MFS Series Trust XIII at 0.621% [24] Top 3 institutional shareholder include: holding being Vanguard International Stock Index at 1.07%, DFA Investment Dimensions at 0.96%, Vanguard Tax Managed Fund at 0.53%
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