{"id":17942,"date":"2024-10-11T07:00:05","date_gmt":"2024-10-10T23:00:05","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=17942"},"modified":"2026-06-08T18:58:13","modified_gmt":"2026-06-08T10:58:13","slug":"capitaland-ascendas-reit-backfilling-vacant-space","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hans\/capitaland-ascendas-reit-backfilling-vacant-space\/","title":{"rendered":"CapitaLand Ascendas REIT-Backfilling Vacant Space"},"content":{"rendered":"<p><em>Excerpts from UOBKayHian report<\/em><\/p>\n<h2>CapitaLand Ascendas REIT (<span style=\"font-size: 16px;\">SGX: A17U<\/span>)<\/h2>\n<ul>\n<li>CapitaLand Ascendas REIT clocked broad-based positive rental reversion of 11.7% in 2Q24 (Singapore: +11.9%, Australia: +7.7%, UK\/Europe: +10.1% and US: +11.9%).<\/li>\n<li>Portfolio occupancy eased 0.2ppt qoq to 93.1%. CLAR has a resilient balance sheet with average debt maturity at 3.7 years. Management plans to scale up in new economy assets such as data centres.<\/li>\n<li>CLAR provides a resilient 2024 distribution yield of 6.0% (MINT: 6.0%).<\/li>\n<\/ul>\n<p>Maintain BUY with a target price of S$3.44.<\/p>\n<h2>Generating steady growth<\/h2>\n<p>CapitaLand Ascendas REIT (CLAR) reported DPU of 7.524 S cents for 1H24 (-2.5% yoy), which is in line with our expectationsGross revenue increased 7.2% yoy in 1H24, driven by acquisitions completed in 2023 and newly completed properties.<\/p>\n<p>NPI grew 3.9% yoy, while NPI margin narrowed 2.3ppt yoy to 68.6%. Finance costs increased 16.3% yoy.<\/p>\n<h2>Maintaining positive rental reversion<\/h2>\n<p>CLAR achieved positive rental reversion of 11.7% for leases that were renewed in multi-tenant buildings in 2Q24 (Singapore: +11.9%, Australia: +7.7%, UK\/Europe: +10.1% and US: +11.9%).<\/p>\n<p>Management expects average rental reversion at positive high single-digit for 2024.<\/p>\n<h2>Portfolio occupancy eased 0.2ppt qoq to 93.1%<\/h2>\n<p>Occupancy for Singapore eased slightly by 0.3ppt qoq to 92.0% in 2Q24 due to lower occupancy for the logistics property at 40 Penjuru Lane.<\/p>\n<p>Occupancy for the US eased 1.8ppt qoq to 87.7% due to the expiration of leases for two single-tenant properties at Lackman Business Centre 4 in Kansas City (logistics) and 9405 Gemini in Portland (business space).<\/p>\n<p>Occupancy for Australia was stable at 96.8% with higher occupancy for business space properties.<\/p>\n<h2>Prudent capital management<\/h2>\n<p>Aggregate leverage was stable at 37.8% as of Jun 24. 83% of CLAR\u2019s borrowings are on fixed interest rates or hedged to fixed rates. Its weighted average all-in cost of debt eased 0.1ppt qoq to 3.7% in 2Q24. Cost of debt should maintain at current levels till end-24.<\/p>\n<h2>Well-spread debt maturity profile<\/h2>\n<p>CLAR obtained a S$300m seven-year green loan and issued S$300m in 10-year green bonds to refinance existing borrowings in 1H24. Thus, the average debt maturity has lengthened to 3.7 years.<\/p>\n<h2>Generating steady growth from diversified portfolio<\/h2>\n<p>Management plans to recycle assets in Singapore and reposition toward technology, life science and logistics properties. Properties in UK\/Europe are able to provide stable contributions due to long WALE of 6.0 years.<\/p>\n<p>Demand for logistics properties in Australia has normalised with leasing downtime reverting back to the usual 6-12 months. Occupancy for business parks in the US could slip lower as the work-from-home arrangement is quite entrenched.<\/p>\n<h2>Rejuvenating portfolio in Singapore<\/h2>\n<p>CLAR has six ongoing redevelopments (1 Science Park Drive (34% stake), 27 IBP and 5 Toh Guan Road East) and AEIs (80 Bendemeer Road,<br \/>\nAperia and ONE@Changi City) worth a total of S$573m. It has commenced two new AEIs in Singapore with a total investment of S$24.2m:<\/p>\n<ul>\n<li>Aperia (S$22.7m). The drop-off point and entrances will be upgraded to enhance tenants\u2019 and visitors\u2019 arrival experience. The retail mall layout and tenant mix will be enhanced to increase footfall.<\/li>\n<li>ONE@Changi City (S$1.5m). The interior of the South Tower lobby will be refurbished and modernised to create a welcoming waiting area and collaborative discussion space for tenants and visitors.<\/li>\n<\/ul>\n<h2>Valuation\/Recommendation<\/h2>\n<p>Maintain BUY. Our target price of S$3.44 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. Contributions from development projects and AEIs.<\/p>\n<figure id=\"attachment_17945\" aria-describedby=\"caption-attachment-17945\" style=\"width: 1528px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/09\/CapitaLand-Ascendas-REIT-share-price.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-17945 size-full\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/09\/CapitaLand-Ascendas-REIT-share-price.jpg\" alt=\"CapitaLand Ascendas REIT share price\" width=\"1528\" height=\"460\" \/><\/a><figcaption id=\"caption-attachment-17945\" class=\"wp-caption-text\">CapitaLand Ascendas REIT share price<\/figcaption><\/figure>\n<p>You can find the full report <em><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/09\/CapitaLand_Ascendas_REIT.pdf\">here<\/a> <\/em>and the company website <a href=\"https:\/\/investor.capitaland-ascendasreit.com\/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\"><em>here.\u00a0<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excerpts from UOBKayHian report CapitaLand Ascendas REIT (SGX: A17U) CapitaLand Ascendas REIT clocked broad-based positive rental reversion of 11.7% in 2Q24 (Singapore: +11.9%, Australia: +7.7%, UK\/Europe: +10.1% and US: +11.9%). Portfolio occupancy eased 0.2ppt qoq to 93.1%. CLAR has a resilient balance sheet with average debt maturity at 3.7 years. Management plans to scale up [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":17947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[3052,3051],"tags":[144,1650,1964,2379,2816,2905,2906],"class_list":["post-17942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-exchange-listed-companies-singapore","category-singapore","tag-reits","tag-data-centre-reit","tag-good-reit","tag-capitaland-ascendas-reit","tag-business-park-reits","tag-capitaland-ascendas-reit-share-price","tag-industrial-reit"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/comments?post=17942"}],"version-history":[{"count":5,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17942\/revisions"}],"predecessor-version":[{"id":17950,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17942\/revisions\/17950"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media\/17947"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media?parent=17942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/categories?post=17942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/tags?post=17942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}