CGS International
May 28, 2025
CapitaLand Ascendas REIT Expands Singapore Portfolio with S\$700 Million Acquisition: A Comprehensive REIT Sector Analysis
CapitaLand Ascendas REIT (CLAR): Strategic Expansion in Singapore
CapitaLand Ascendas REIT (CLAR) has unveiled a significant move to strengthen its Singapore footprint, proposing the acquisition of two premium assets—9 Tai Seng Drive (9TSD), a six-storey tier-III data centre, and 5 Science Park Drive (5SPD), a six-storey business space—at a combined value of S\$700.2 million. This transaction, pending unitholders’ approval at an extraordinary general meeting (EGM), is designed to increase CLAR’s Singapore exposure to 67% of its enlarged assets under management (AUM), totaling S\$17.6 billion.
- 9TSD Data Centre: 6,968 sq m NLA, fully occupied by digital, e-commerce, and financial services tenants. WALE is 4.4 years. Acquisition price: S\$455.2m at a 7.2% NPI yield.
- 5SPD (Shopee Building): 22,488 sq m NLA, entirely leased to Shopee with 1.5 years remaining WALE. Acquisition price: S\$245m (including S\$30m deferred to Nov 2026), yielding 6.1% NPI initially.
These assets further entrench CLAR’s position in the high-growth “Geneo” life sciences and innovation cluster in Singapore Science Park 1, and the acquisition of 9TSD will elevate CLAR’s Singapore data centre AUM to over S\$1 billion and boost its overall data centre AUM by 32.8% to approximately S\$1.9 billion.
Growth Prospects: Rental Uplift and Future Redevelopment
Management sees strong potential for rental upside at both new assets:
- 5SPD’s current rent is about 15% below market rates, positioning CLAR for positive rental reversions when Shopee’s lease expires in 2026.
- 9TSD’s rent is estimated at 30% below current market colocation rates, offering further uplift opportunities upon lease renewal.
Additionally, CLAR may increase IT capacity at 9TSD by converting unused space into data halls, subject to regulatory approval, a move expected to enhance asset returns.
Financing the Acquisition: Private Placement and Gearing Impact
To partially fund the acquisition, CLAR will launch a private placement to raise at least S\$500 million at S\$2.465–2.515 per unit. Of this, S\$412.6 million will go towards the acquisitions, while S\$81.6 million will be used to pare down debt. The proforma post-acquisition gearing is projected at 38.3%, a slight improvement from 38.9% at 1Q25. The proforma DPU accretion is estimated at +1.4%, underscoring the accretive nature of this investment.
Investment Thesis: Resilience and Upside Catalysts
CGS International maintains an Add rating on CLAR, with an unchanged DDM-based target price of S\$3.10, reflecting an 18.6% upside from the current price of S\$2.61. Key investment highlights include:
- A highly diversified and resilient portfolio
- A healthy balance sheet with capacity for further acquisitions
- Potential re-rating catalysts from faster global recovery and accretive new acquisitions
Downside risks include a prolonged economic downturn, which could impact rental pricing power.
Key Financial Forecasts for CapitaLand Ascendas REIT
|
Dec-25F |
Dec-26F |
Dec-27F |
| Net Profit (S\$m) |
670.0 |
691.0 |
711.4 |
| Core EPS (S\$) |
0.15 |
0.16 |
0.16 |
| Dividend Yield (%) |
5.90 |
6.08 |
6.25 |
| DPS (S\$) |
0.15 |
0.16 |
0.16 |
| FD Core P/E (x) |
17.15 |
16.65 |
16.20 |
| Recurring ROE (%) |
6.48 |
6.67 |
6.86 |
| P/BV (x) |
1.11 |
1.11 |
1.11 |
Major shareholders include CapitaLand (19.2%), Blackrock (6.0%), and State Street Corp (4.4%). The current market capitalization stands at S\$11,485 million, with a free float of 80.3%.
Peer Comparison: Singapore REIT Sector Overview
The report provides a comprehensive comparison of Singapore-listed REITs across Hospitality, Industrial, Office, Retail, Overseas-centric, and Healthcare sectors, including key valuation metrics, dividend yields, and market capitalizations.
Hospitality REITs
| Company |
Ticker |
Market Cap (US\$m) |
Dividend Yield FY25F |
Dividend Yield FY26F |
Dividend Yield FY27F |
| CapitaLand Ascott Trust |
CLAS SP |
2,538 |
7.1% |
7.4% |
7.4% |
| CDL Hospitality Trust |
CDREIT SP |
743 |
6.8% |
8.0% |
8.3% |
| Far East Hospitality Trust |
FEHT SP |
880 |
6.9% |
6.9% |
7.0% |
| Frasers Hospitality Trust |
FHT SP |
773 |
4.1% |
4.4% |
4.8% |
Industrial REITs
| Company |
Ticker |
Market Cap (US\$m) |
Dividend Yield FY25F |
Dividend Yield FY26F |
Dividend Yield FY27F |
| AIMS AMP |
AAREIT SP |
754 |
7.4% |
7.3% |
7.5% |
| CapitaLand Ascendas REIT |
CLAR SP |
8,927 |
5.9% |
6.1% |
6.2% |
| ESR-REIT |
EREIT SP |
1,372 |
9.9% |
10.3% |
10.4% |
| Frasers Logistics & Commercial Trust |
FLT SP |
2,315 |
7.2% |
6.8% |
6.9% |
| Keppel DC REIT |
KDCREIT SP |
3,806 |
4.6% |
4.7% |
4.9% |
| Mapletree Industrial Trust |
MINT SP |
4,256 |
7.1% |
6.9% |
6.9% |
| Mapletree Logistics Trust |
MLT SP |
4,339 |
7.3% |
6.8% |
6.7% |
| Stoneweg European REIT |
SERT SP |
944 |
8.9% |
9.2% |
9.6% |
Office REITs
| Company |
Ticker |
Market Cap (US\$m) |
Dividend Yield FY25F |
Dividend Yield FY26F |
Dividend Yield FY27F |
| Keppel REIT |
KREIT SP |
2,579 |
6.3% |
6.7% |
6.8% |
| OUE REIT |
OUEREIT SP |
1,177 |
7.3% |
7.7% |
8.1% |
| Suntec REIT |
SUN SP |
2,557 |
5.6% |
5.9% |
6.2% |
Retail REITs
| Company |
Ticker |
Market Cap (US\$m) |
Dividend Yield FY25F |
Dividend Yield FY26F |
Dividend Yield FY27F |
| CapitaLand Integrated Commercial |
CICT SP |
11,829 |
5.3% |
5.7% |
5.9% |
| Frasers Centrepoint Trust |
FCT SP |
3,442 |
5.6% |
5.7% |
5.9% |
| Lendlease Global Commercial REIT |
LREIT SP |
913 |
8.2% |
8.3% |
8.4% |
| Mapletree Pan Asia Commercial Trust |
MPACT SP |
4,793 |
6.9% |
7.1% |
7.3% |
| Paragon REIT |
PGNREIT SP |
2,151 |
5.2% |
5.4% |
5.6% |
| Starhill Global REIT |
SGREIT SP |
893 |
7.2% |
7.3% |
7.4% |
Overseas-Centric and Healthcare REITs
| Company |
Ticker |
Market Cap (US\$m) |
Dividend Yield FY25F |
Dividend Yield FY26F |
Dividend Yield FY27F |
| CapitaLand China Trust |
CLCT SP |
916 |
8.4% |
8.5% |
8.6% |
| Elite UK REIT |
ELITE SP |
256 |
9.2% |
9.2% |
9.2% |
| Manulife US REIT |
MUST SP |
110 |
0.0% |
44.5% |
51.6% |
| Sasseur REIT |
SASSR SP |
615 |
9.8% |
10.1% |
10.4% |
| Parkway Life REIT |
PREIT SP |
2,064 |
3.8% |
4.1% |
4.3% |
CapitaLand Ascendas REIT: Financial Statements Overview
Profit & Loss Highlights (S\$ million)
|
Dec-24A |
Dec-25F |
Dec-26F |
Dec-27F |
| Rental Revenues |
1,523 |
1,533 |
1,548 |
1,589 |
| Net Property Income |
1,050 |
1,069 |
1,088 |
1,112 |
| EBITDA |
951 |
968 |
989 |
1,012 |
| Net Profit |
790 |
670 |
691 |
711 |
Balance Sheet Highlights (S\$ million)
|
Dec-24A |
Dec-25F |
Dec-26F |
Dec-27F |
| Total Investments |
16,758 |
16,955 |
17,005 |
17,055 |
| Total Cash & Equivalents |
168 |
71 |
80 |
89 |
| Shareholders’ Equity |
10,309 |
10,359 |
10,368 |
10,377 |
Key Ratios
- Net Property Income Margin: 69.7% (Dec-25F)
- DPS Growth: 1.33% (Dec-25F)
- Gross Interest Cover: 3.59 (Dec-25F)
- Effective Tax Rate: 4.07% (Dec-25F)
- Return on Average Assets: 3.66% (Dec-25F)
Conclusion: CapitaLand Ascendas REIT Well-Positioned for Growth
CapitaLand Ascendas REIT’s bold acquisition strategy, strong balance sheet, and visible rental upside position it as a standout in the Singapore REIT landscape. With stable dividend yields, prudent gearing, and a focus on high-growth segments such as data centres and life sciences, CLAR remains a compelling choice for investors seeking exposure to resilient, income-generating assets in Singapore and beyond.
