CapitaLand Ascendas REIT: Should Singapore Investors Buy Shares Now?

May 19, 2023

As we invest in the stock market for the long term, it is important for us to identify investments that can provide sustainable returns.

By doing this, we will help ourselves more easily build wealth in the long term.

I believe that one such long-term opportunity currently lies in Singapore’s REIT markets.

That chance to create long-term value lies with CapitaLand Ascendas REIT (SGX: A17U), which has consistently shown promise as a reliable addition to any long-term dividend portfolio.

Here’s exactly why I think investors can consider buying shares of one of Singapore’s biggest REITs now.

1. Diversified and high-quality portfolio

CapitaLand Ascendas REIT, simply known as CLAR, boasts a diversified portfolio that spans multiple types of properties – including business and science parks, logistics and distribution centres, industrial, and suburban office properties.

Its property portfolio is also diversified across various countries including Singapore, Australia, the UK, and the US.

This diversification and quality assets can potentially safeguard the REIT from industry-specific and regional economic risks, providing investors with a more stable passive income stream.

2. Stable and resilient dividend

Aside from that, CLAR is also suitable for long-term investment given its stable and growing distributions (or dividends) over the years.

As a REIT, CLAR will pay out at least 90% of its taxable income as distributions to unitholders.

Over the years, its ability to maintain and grow its distribution per unit (DPU) is a testimony to its management’s strong track record and quality assets.

3. Strong track record

Since its listing in November 2002, CLAR has delivered strong returns and steady growth.

It has proven its resilience through multiple market cycles, including the Global Financial Crisis in 2008 and the recent COVID-19 pandemic.

This track record of robust performance underlines the strength of its management team and its ability to effectively navigate challenging economic conditions.

4. Growth prospects

Looking forward, I think CLAR also presents promising growth prospects for Singapore REIT investors.

It is backed by its sponsor, CapitaLand Investment Ltd (SGX: 9CI), one of Asia’s largest diversified real estate groups, which provides the REIT with a strong pipeline of properties for potential acquisition.

Management has also demonstrated its commitment to proactive asset management and capital recycling strategies to enhance the REIT’s value.

Recently, CLAR proposed to acquire The Shugart in Singapore and planned the purchase of a property in Europe as well as undertaking a proposed redevelopment of a logistics facility in Singapore.

5. Sustainability initiatives

For investors looking for sustainable investing, CLAR is also committed to environmental sustainability.

The trust has undertaken numerous green initiatives and has a number of properties certified as Green Mark buildings by the Building and Construction Authority (BCA) of Singapore.

This commitment not only helps reduce the environmental impact of their operations but also can potentially lower operating costs and increase the appeal of their properties to tenants.

Buying CapitaLand Ascendas REIT for long-term dividends

CLAR has diversification, a strong track record, resilient DPU and commitment to sustainability, all of which make it a good investment option for long-term dividend investors.

With a mix of stability and growth, it is ideal for investors looking for long-term capital appreciation and a consistent passive income stream.

While CLAR could be impacted by some of the market risks, such as a potential global recession, rising interest rates and the high inflationary environment, the REIT has a strong track record that warrants a place in your portfolio.

Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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