Excerpts from UOBKayHian report

CapitaLand Ascendas REIT (SGX: A17U)

  • CapitaLand Ascendas REIT (CLAR) continued to clock strong positive rental reversion of 15.2% in 4Q23 (Singapore: 16.9%, Australia: 21.8%, the US: 11.0%).
  • Portfolio occupancy eased slightly by 0.3ppt qoq to 94.2% in 4Q23. CLAR has a resilient balance sheet with average debt maturity at 3.4 years.
  • Management plans to scale up in new economy assets, including logistics properties. CLAR provides a resilient 2024 distribution yield of 5.3% (MINT: 5.6%).

Maintain BUY with a target price of S$3.62.

Growth via acquisitions and higher occupancies

Gross revenue grew 11.0% yoy in 2H23 due to the acquisition of three Singapore properties, namely 622 Toa Payoh Lorong 1, 1 Buroh Lane and The Shugart in Jan 23, Feb 23 and May 23 respectively.

NPI increased 4.6% yoy despite higher utility expenses and property taxes in Singapore. Finance costs increased 26.5% yoy.

Strong rental reversion from multiple drivers

CLAR achieved positive rental reversion of 15.2% in 4Q23, driven by Singapore (16.9%), Australia (21.8%) and the US (11.0%).
Logistics properties in Singapore and Australia recorded strong positive reversions of 53.6% and 9.1% respectively.

Business space properties in Singapore, Australia and the US recorded positive reversions of 13.1%, 22.3% and 11.0% respectively.

Lower occupancy in the US

Portfolio occupancy eased 0.3ppt qoq to 94.2% in 4Q23. Occupancy for the US slipped 1.7ppt qoq to 90.4% due to downsizing by Nike in Portland/

 NAV per unit declined 4.6% yoy S$2.26

CLAR suffered valuation losses of S$466m for the US (-18.5%) and S$102m for Australia (-4.5%). This was partially offset by valuation increases of S$239m for Singapore (+2.4%) and S$41m for the UK/Europe (+2.7%).

Overall, CLAR’s portfolio valuation declined by 1.8% on a same-store basis.


Maintain BUY. Our target price of S$3.62 is based on DDM (cost of equity: 7.0%, terminal growth: 2.5%). Resiliency and growth from business parks, hi-tech buildings, life sciences, logistics and data centre segments and contributions from development projects and AEIs.

CapitaLand Ascendas Trutst share price chart
CapitaLand Ascendas Trutst share price chart

You can find the full report here and the company website here.

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