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 passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.

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