CapitaLand Ascendas REIT 1H 2025 Financial Analysis

Financial Metrics Highlighted in the Report

• Gross Revenue (1H 2025): S\$754.8 million (↓2.0% YoY from S\$770.1 million in 1H 2024) [[1]]
• Net Property Income (1H 2025): S\$523.4 million (↓0.9% YoY from S\$528.4 million in 1H 2024) [[1]]
• Distributable Income (DI, 1H 2025): S\$331.1 million (↑0.1% YoY from S\$330.8 million in 1H 2024) [[1]]
• Distribution per Unit (DPU, 1H 2025): 7.477 Singapore cents (↓0.6% YoY from 7.524 cents in 1H 2024) [[1]]
• Applicable Number of Units: 4,428 million (↑0.7% YoY from 4,397 million) [[1]]
• Portfolio Occupancy Rate: 91.8% (as of 30 June 2025, up from 91.5% on 31 March 2025) [[3]]
• Aggregate Leverage: 37.4% (↓from 38.9% on 31 March 2025) [[4]]
• Weighted Average All-in Cost of Debt: 3.7% (1H 2025; 3.6% in 1Q 2025) [[4]]
• Interest Coverage Ratio: 3.7x (statutory limit: 1.5x) [[4]]
• Weighted Average Lease Expiry (WALE): 3.7 years [[4]]
• Green-Certified Properties: 86 (49% of portfolio by GFA) [[5]]
• Solar-Equipped Properties: 27 (as of 30 June 2025) [[5]]

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

• Gross Revenue: Down 2.0% YoY (S\$754.8m vs S\$770.1m). The decrease is mainly due to property divestments and decommissioning [[2]].
• Net Property Income: Down 0.9% YoY (S\$523.4m vs S\$528.4m) [[1]].
• Distributable Income: Stable, up 0.1% YoY (S\$331.1m vs S\$330.8m) [[1]].
• DPU: Down 0.6% YoY (7.477 cents vs 7.524 cents). The decline is due to a larger unit base from new issuance [[2]].
• Occupancy Rate: Up slightly from 91.5% (31 Mar 2025) to 91.8% (30 Jun 2025) [[3]].
• Aggregate Leverage: Down from 38.9% (31 Mar 2025) to 37.4% (30 Jun 2025) [[4]].
• Rental Reversion: Average of 9.5% in 1H 2025; 8.0% in 2Q 2025. By region in 2Q 2025: Singapore 7.8%, US 10.9%, Australia 3.5% [[4]].

Historical Performance Overview

The REIT has shown stable distributable income and DPU over the years despite challenging macroeconomic conditions. While gross revenue and net property income have slightly decreased YoY due to asset recycling, the overall portfolio quality and occupancy remain strong. The REIT continues to pursue accretive acquisitions and asset enhancement initiatives, indicating solid operational management and long-term sustainability [[2]], [[3]].

Asset Revaluation or Delay

There is no explicit mention of asset revaluation or any delay in asset revaluation in the report.

Exceptional Earnings and Expenses

The sale of Parkside, a business space property in Portland, US, at a 45% premium to its independent market valuation, resulted in a notable gain on divestment [[3]]. This is an exceptional gain and was highlighted as part of their capital recycling strategy.

Full Extract of CEO Statement (No Chairman Statement Provided)

Mr William Tay, Chief Executive Officer and Executive Director of the Manager, said, “Despite the ongoing macroeconomic uncertainties, CLAR’s distributable income of S\$331.1 million and DPU of 7.477 cents for 1H 2025 were stable. This underscores the continued strength of our diversified portfolio, operational management and disciplined execution of our capital management strategies.”
“CLAR is set to add approximately S\$725 million of prime, income-producing assets in Singapore. 9 Tai Seng Drive, a Tier III colocation data centre and 5 Science Park Drive, a premium business space property are well-located, modern properties that are fully leased to reputable tenants and will contribute positively to our income stream. These two properties will further anchor CLAR in Singapore, with Singapore accounting for about 67% of AUM when the transactions are completed,” Mr Tay added. “We will stay responsive to changing market conditions and are confident of navigating through these uncertain times.” [[2]]

Assessment: The CEO’s statement is positive, reflecting management’s confidence in the quality of the portfolio and ability to manage through macroeconomic uncertainty. The emphasis on accretive acquisitions, high occupancy, and focused capital management supports a positive outlook.

Potential Divestment, Listing, or Fundraising

The Manager divested Parkside in the US for S\$26.5 million, a 45% premium to valuation [[3]]. There is mention of ongoing capital recycling as a core strategy, but no mention of potential IPOs or listings.

New Shares Issuance and Dilution

• New Shares Issued: The applicable number of units increased 0.7% YoY due to the private placement in May 2025 (to fund acquisitions) and payment of management fees in units [[1]].
• No Mention of Share Buyback: There is no mention of share buyback mandate or plans.

Proposed Dividend

• DPU (1H 2025): 7.477 Singapore cents, down 0.6% YoY from 7.524 cents in 1H 2024. This is a slight decrease due to unit base enlargement, not operational performance [[1]].

Noteworthy Corporate Actions

• Acquisitions: Three properties acquired (DHL Indianapolis, 9 Tai Seng Drive, 5 Science Park Drive) for a total of S\$878 million [[2]].
• Redevelopment: 1 Science Park Drive redevelopment completed, and other AEIs ongoing [[3]].
• Divestment: Parkside in Portland, US, sold at a premium [[3]].
• Equity Fundraising: S\$500 million raised in May 2025 [[4]].

Forecasted Events and Developments

• Acquisitions of 9 Tai Seng Drive and 5 Science Park Drive expected to complete in 2H 2025, increasing Singapore portfolio value [[2]].
• Six ongoing development/redevelopment/AEI projects with aggregate investment of S\$498.4 million, completing between 3Q 2025 and 1Q 2028 [[3]].
• Planned redevelopment of a data centre in the UK [[6]].

Macro Environment Risks

• The report highlights macroeconomic uncertainties, global trade tensions, inflation trends, and monetary policy risks as potential headwinds [[5]], [[7]].
• No mention of natural disasters, disputes, court cases, government investigations, or ceasing of tax benefits.

Insights and Overall Assessment

The report presents stable operational and financial performance despite headwinds. While gross revenue and NPI dipped slightly due to divestments, distributable income and DPU remain stable, with the DPU decrease solely due to a larger unit base. The REIT has sustained high occupancy, strong lease expiry profile, healthy leverage, and robust interest coverage. Accretive acquisitions, AEIs, and ongoing capital recycling support long-term growth and resilience. The management’s proactive communication and sustainability achievements (49% green-certified GFA) are further positives for investors. There are no indications of material errors, unusual transactions, or unreported risks in the financial report.

Conclusion: The outlook remains cautiously optimistic. The REIT is well-positioned to navigate volatile markets, with a disciplined approach to capital management, a diversified and high-quality portfolio, and continued focus on sustainability and value creation for unitholders.

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