CapitaLand Ascendas REIT Announces Major Portfolio Acquisitions and Strategic Expansion

Key Highlights

• Three major acquisitions: (A) 100% interest in a logistics asset in Singapore, (B) 50% interest in a business space asset in Singapore, and (C) 49% interest in a hyperscale data centre in Japan.
• Total acquisition outlay: Approximately S\$1.41 billion, funded through both equity and debt.
• Portfolio size to grow to S\$19.9 billion in AUM, with 66% anchored in Singapore.
• Strategic entry into Japan’s data centre market, marking the REIT’s expansion into a new high-growth region.
• Accretive to DPU and NPI, with pro forma DPU accretion of up to 2.1% and NPI growth of 6.9%.
• Strengthens income stability with high occupancy rates and long WALEs across the acquired assets.
• Potential price sensitivity: Significant portfolio expansion, sector diversification, entry into Japan’s data centre market, and DPU accretion are all likely to impact share value.

Detailed Acquisition Overview

1. Acquisition of 100% Interest in 25 Loyang Crescent, Singapore (SG Logistics Asset)

• Acquired from Toll Offshore Petroleum Services Pte. Ltd. with a leaseback arrangement for 12 years (and an optional 6-year extension for a reduced area).
• Asset is a multi-asset logistics and industrial complex located in Loyang, a strategic logistics hub near Changi Airport and future Changi East Industrial Zone.
• Features include 197,800 sqm NLA, modern four-storey ramp-up warehouse, 13 standalone buildings, 5 terrace workshops, and open yard space.
• Long land lease tenure of approximately 28 years remaining, with a current plot ratio of 0.52 and 0.48 untapped plot ratio for future development (equivalent to 152,000 sqm of potential).
• Fully leased to Toll Offshore Petroleum Services under an absolute triple-net lease, providing stable income with an annual rent escalation of 2.5%.
• First-year NPI yield of 6.9% pre-transaction and 6.4% post-transaction costs.
• Pro forma DPU uplift: 0.239 Singapore cents or 1.59% for FY2025.
• Purchase consideration: S\$457.8 million (2.7% discount to valuation), total outlay S\$536.9 million.

2. Acquisition of 50% Interest in Ascent, 2 Science Park Drive, Singapore (SG Business Space Asset)

• Jointly acquired with a global sovereign wealth fund (each holding 50%).
• Prime, seven-storey business space asset in Singapore Science Park, a premier technology and R&D hub.
• GFA: 51,560 sqm, NLA: 43,000 sqm, with a long remaining land lease tenure of 55.5 years.
• Major tenants include J&J, Dyson, and Merck, from healthcare, biomedical sciences, pharmaceutical, and technology sectors.
• Occupancy rate: 90.7% as at 31 December 2025, with annual rent escalation clauses (1-2%).
• First-year NPI yield: 5.6% pre-transaction and 5.2% post-transaction costs.
• Pro forma DPU uplift: 0.046 Singapore cents or 0.31% for FY2025.
• Purchase price (100%): S\$490 million, with CLAR’s share S\$245 million. Discount of 1.7% to average independent valuation. Total outlay S\$260.9 million.
• SG Business Space Acquisition is an “interested party transaction” with the fee paid in new Units (subject to a one-year moratorium).

3. Acquisition of 49% Interest in a Tier III Hyperscale Data Centre, Greater Osaka, Japan

• CLAR’s strategic debut in the Japanese data centre market, partnering with a fund managed by Mitsui & Co Realty Management Ltd (Mitsui).
• 49% interest in both the data centre trust and operating company; Mitsui holds the remaining 51%.
• Modern, freehold asset completed in 2023 with a current IT supply of 40.5MW, expandable by 13.3% (subject to power commencement).
• Fully leased to a global investment-grade hyperscaler with a 14.2-year WALE and 1% annual rent escalation.
• Located in Greater Osaka, a leading and fast-growing APAC data centre hub, with projected occupancy above 90% by 2028 driven by hyperscale demand.
• First-year NPI yield: 4.3% pre-transaction and 4.2% post-transaction costs.
• Pro forma DPU uplift: 0.041 Singapore cents or 0.27% for FY2025.
• Purchase consideration: Approx. S\$620.7 million (¥76.44 billion), 2.5% discount to valuation. Total outlay S\$627.6 million.

Portfolio and Financial Impact

• Portfolio Asset Under Management (AUM): Grows to S\$19.9 billion, with Singapore accounting for 66% (S\$13.2 billion).
• Segmental Diversification: Business Space AUM decreases to 34%; Logistics rises to 27% (S\$5.3 billion); Data Centres to 13% (S\$2.6 billion).
• Income Stability: Post-acquisitions, occupancy rises to 91.5% and WALE to 4.3 years. Technology, logistics, and biomedical sciences tenants contribute ~70.1% of monthly rental income.
• Pro Forma Financials (FY2025):
  • NPI increases by 6.9% to S\$1,141.5 million.
  • DPU increases by 2.1% to 15.323 Singapore cents.
  • NAV per Unit rises to S\$2.36.
  • Aggregate leverage increases slightly from 39.0% to 39.7%.
• Funding: S\$496.6 million from new equity (private placement and preferential offering), S\$911.4 million from debt, and ~S\$2.3 million in Manager’s fee Units.

Key Strategic and Price Sensitive Considerations for Investors

• Portfolio Rejuvenation and Geographic Diversification: The acquisitions align with CLAR’s strategy to anchor in Singapore while expanding into developed markets with healthy fundamentals, notably Japan’s booming data centre segment.
• Accretive Transactions: All three acquisitions are DPU and NPI accretive, supporting long-term income growth and value creation for unitholders.
• Increased Exposure to High-Growth Sectors: The deals further pivot CLAR towards technology, logistics, and biomedical sciences, positioning the REIT to capture secular growth trends such as digital transformation and biomedical innovation.
• Potential Pipeline for Further Expansion: The manager indicates ongoing due diligence for additional light industrial and ramp-up logistics assets in Singapore, which could further enhance portfolio metrics and DPU accretion if pursued.
• Leverage and Capital Management: While aggregate leverage remains below 40%, investors should monitor future debt levels as more acquisitions are considered.
• Interested Party Transactions: Some transactions involve related parties (e.g., Temasek and CapitaLand Investment Limited), but their value is below the 3% threshold of net tangible assets, so no unitholder approval is required.

Conclusion

The announced acquisitions represent a significant strategic expansion for CapitaLand Ascendas REIT, enhancing its portfolio quality, sectoral and geographic diversification, and income resilience. The entry into Japan’s data centre market is particularly noteworthy, exposing the REIT to secular growth drivers in digital infrastructure. These developments are likely to have a positive impact on the REIT’s long-term growth outlook and are highly relevant for share valuation and investor sentiment.

Disclaimer: This article is for informational purposes only and does not constitute an offer, invitation, or solicitation to buy or sell any securities of CapitaLand Ascendas REIT. Investors are advised to conduct their own due diligence and consult financial advisors before making investment decisions. The information provided is based on current publicly available data and may be subject to change. The past performance of CapitaLand Ascendas REIT is not necessarily indicative of future results. All investments are subject to risks, including the possible loss of principal.

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