CapitaLand Ascendas REIT 1H 2025 Financial Analysis – Hedge Fund Perspective

Key Financial Metrics

• Gross Revenue: S\$754.8 million (1H 2025), S\$770.1 million (1H 2024), S\$753.0 million (2H 2024) [[7]], [[8]], [[54]]
• Net Property Income (NPI): S\$523.4 million (1H 2025), S\$528.4 million (1H 2024), S\$521.5 million (2H 2024) [[7]], [[8]], [[54]]
• Total Amount Available for Distribution: S\$331.1 million (1H 2025), S\$330.8 million (1H 2024), S\$338.0 million (2H 2024) [[7]], [[8]], [[54]]
• Distribution Per Unit (DPU): 7.477 cents (1H 2025), 7.524 cents (1H 2024), 7.681 cents (2H 2024) [[7]], [[8]], [[54]]
• Investment Properties: S\$16.83 billion (as at 30 Jun 2025), +0.4% vs 31 Dec 2024 [[5]]
• Portfolio Occupancy: 91.8% (1H 2025), 92.8% (31 Dec 2024) [[5]]
• Portfolio Rental Reversion: +9.5% (1H 2025), average portfolio rental reversion in 2Q 2025 was 8.0% [[5]], [[29]]
• Aggregate Leverage: 37.4% (1H 2025), 37.7% (31 Dec 2024) [[5]], [[17]], [[19]]
• Cost of Debt: 3.7% (unchanged) [[5]]

Year-on-Year and Quarter-on-Quarter Comparison

• Gross Revenue:
  • YoY: Decreased by 2.0% from S\$770.1m (1H 2024) to S\$754.8m (1H 2025)
  • QoQ: Slight increase by 0.2% from S\$753.0m (2H 2024) to S\$754.8m (1H 2025)
• Net Property Income:
  • YoY: Decreased by 0.9% from S\$528.4m (1H 2024) to S\$523.4m (1H 2025)
  • QoQ: Increased by 0.4% from S\$521.5m (2H 2024) to S\$523.4m (1H 2025)
• Distribution Per Unit:
  • YoY: Decreased by 0.6% from 7.524 cents (1H 2024) to 7.477 cents (1H 2025)
  • QoQ: Decreased by 2.7% from 7.681 cents (2H 2024) to 7.477 cents (1H 2025)
• Total Amount Available for Distribution:
  • YoY: Flat (S\$331.1m vs S\$330.8m in 1H 2024)
  • QoQ: Decrease by 2.0% from S\$338.0m (2H 2024) to S\$331.1m (1H 2025)

Historical Performance

Gross revenue and NPI have slightly declined YoY, while DPU has also dropped marginally. The overall historical performance shows stability but with slight downward pressures on income due to asset divestments and increased unit base [[54]].

Asset Revaluation or Delay

The report mentions increases in investment property values (+0.4% vs 31 Dec 2024) and states the average property values for acquisitions and disposals are based on independent market valuations [[5]], [[12]], [[13]], [[15]]. No delays or deferrals in revaluation are stated.

Exceptional Earnings and Expenses

The only mention of exceptional items is the sale of Parkside, Portland, US, which was completed at a ~45% premium to market valuation, suggesting a one-off gain [[14]], [[15]].

Early or Delayed Profit/Loss Recognition

There is mention of an “advanced distribution” paid on 30 Jun 2025 for the period 1 Jan 2025 to 5 Jun 2025, indicating some income was recognised and paid out early [[7]], [[9]].

Divestments and Fundraising

• Completed divestment of Parkside, Portland, US, for S\$26.5 million (45% above valuation) [[14]], [[15]].
• Private placement in June 2025, issuance of units for divestment fees and base management fees [[7]], [[8]].
• No mention of new listings or spin-offs.

New Share Issues, Placements, and Dilution

• Increase in applicable units from 4,397 million (1H 2024) to 4,428 million (1H 2025), due to private placement, issuance for divestment and management fees [[7]], [[8]], [[17]].
• No mention of share buybacks or mandates for buybacks.

Dividend/Distribution

• Proposed DPU for 1H 2025: 7.477 cents (down 0.6% YoY, down 2.7% QoQ) [[5]], [[7]], [[8]], [[54]].
• Distribution payment date: 4 September 2025 [[9]].

Potential or Past Material Events and Macro Environment Risks

• The report highlights macroeconomic uncertainty, global trade tensions, policy risks, and interest rate volatility as key downside risks [[38]], [[39]], [[40]], [[42]], [[43]].
• No mention of natural disasters, disputes, court cases, or the ceasing of tax benefits.

Investor-Relevant Details

• Stability in portfolio performance, but pressure on occupancy and rental income in some geographies [[23]], [[24]], [[25]].
• Significant acquisition activity in Singapore (9 Tai Seng Drive and 5 Science Park Drive) and the US (DHL Indianapolis) [[11]], [[12]], [[13]].
• Strong focus on sustainability, green certifications, and green financing (38% of borrowings are green debt) [[18]], [[52]].
• Portfolio WALE of 3.7 years, well-diversified tenant base, and low concentration risk [[30]], [[31]], [[47]], [[48]], [[49]].
• Ongoing asset enhancement initiatives and developments totalling S\$498.4 million [[36]].

Forecasted Events & Developments

• Six ongoing projects worth S\$498.4 million are under development or redevelopment, with completion timelines into 2028 [[36]].
• Acquisitions of data centre and business space assets in Singapore expected to grow portfolio value by S\$724.6 million [[11]], [[12]], [[13]].
• Expectation of continued positive rental reversions in the mid-single digits for FY 2025 [[29]].

Insights and Overall Assessment

Overall, the report reflects:

• Stable but slightly declining operational metrics (revenue, NPI, DPU).
• Strong balance sheet and prudent capital management (high fixed-rate debt, natural hedges, and healthy leverage).
• Ongoing portfolio optimization through active asset management, acquisitions, redevelopments, and divestments.
• Robust sustainability initiatives and progress in green financing.
• Exposure to macroeconomic and policy uncertainties, but portfolio diversification provides resilience.

Conclusion: The report is generally positive for long-term investors seeking stability and sustainability, though short-term earnings growth is muted due to divestments and a larger unit base. Risks are primarily macro-driven rather than company-specific. No major red flags or accounting irregularities were detected.

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