OCBC Investment Research, 29 October 2025
Excerpt from OCBC Investment Research report.
Report Summary
- CapitaLand Ascott Trust (CLAS) is Asia Pacific’s largest lodging trust, with a diverse portfolio across 45 cities in 16 countries. Its 3Q25 gross profit grew 1% YoY, driven by a 3% increase in portfolio revenue per available unit (RevPAU).
- CLAS benefits from resilience due to geographic and sector diversification, including exposure to student accommodation in the US and rental housing in Japan, which are less cyclical.
- The trust’s main markets generally performed well, with RevPAU growth in Australia, UK, US, and Japan. Singapore lagged due to delayed events but is expected to recover in 4Q25.
- Emerging risks are noted in the US, including a government shutdown and softer student accommodation demand, but CLAS’s portfolio is relatively sheltered due to high domestic guest proportions.
- Capital management is robust, with gearing improving and borrowing costs expected to remain stable, potentially declining in FY26.
- The fair value estimate is maintained at SGD1.02, supported by recent portfolio reconstitution in Japan and steady distribution forecasts.
- CLAS’s ESG rating was upgraded in June 2025, leading peers in governance and sustainability, with 43.4% of assets certified green.
- Key risks include macroeconomic slowdowns, increased competition, and forex volatility, while potential catalysts are stronger lodging demand and DPS-accretive acquisitions.
- Financials show steady revenue and profit growth, with improving margins and debt metrics, supporting dividend stability.
- CLAS is recommended as a Buy, with expected total returns above 10% including dividends.
above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Investment Research can be the first to access the full report from the OCBC Investment Research website :
https://www.ocbc.com/group/investment-research
