CapitaLand Ascendas REIT’s Q3 Update: Stable Growth and Strategic Investments

October 30, 2023

  • CLAR reports 94.5% portfolio occupancy in Q3 2023, up from 94.4% last year.

  • Singapore and Australia drive growth, offsetting minor dips in Europe/UK.

  • Future projects and rental reversions signal continued growth potential.

In the dynamic landscape of the real estate market, CapitaLand Ascendas REIT (SGX: A17U), commonly known as CLAR, has made notable strides. With a Q3 2023 portfolio occupancy registering at 94.5%, it is a modest yet positive shift from the 94.4% at the end of 2022. This growth is primarily fueled by robust occupancies in Singapore and Australia, even amidst the integration of a new data centre in the UK

In Singapore, the occupancy rate has risen to 92.7%. This can be credited to enhanced engagements with properties such as 10 Toh Guan, LogisTech, and The Aries, Sparkle & Gemini buildings. Moreover, there is a notable surge in demand from sectors like the biomedical industry, agri/aquaculture, and trading companies. With CLAR investing approximately S$600 million in ongoing redevelopment projects, of which 91% are in Singapore, the company looks poised for a steady return by the beginning of 2026.

Looking internationally, CLAR continues to maintain a robust presence. Australia’s occupancy sits comfortably at 99%, with a focus on cities like Sydney and Brisbane. The newly developed MQX4 in Sydney adds to CLAR’s diversified asset base. Meanwhile, in the US, a stable 92.1% occupancy is reported, with a positive 8.5% rental reversion in the business space.

On the other hand, the UK and Europe saw a slight drop but remain a strong contributor to the REIT. A 99.3% occupancy rate in Q3 2023 and a commendable 28.8% rental reversion in the logistics department indicate a balanced performance in these regions.

With a diverse asset portfolio, strong track record, robust balance sheet and cash flow, and innovative strategies, the odds look good for CLAR. The winds of a global recovery, coupled with CLAR’s potential for new and accretive acquisitions, make the future look promising. However, as with all investments, it is essential to note the potential pitfalls. A recession or sharp economic downturn could potentially hamper CLAR’s pricing ability for positive reversions.

Disclaimer: ProsperUs Head of Content & Investment Lead 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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