CapitaLand Ascendas REIT Announces Major S\$900 Million Equity Fund Raising

Key Highlights of the Announcement

• Equity Fund Raising Size: CapitaLand Ascendas REIT (“CLAR”) is launching an equity fund raising to raise gross proceeds of no less than approximately S\$900 million. This is a substantial capital raising event that is likely to impact the REIT’s share value and market liquidity.
• Dual Tranche Structure: The fund raising consists of:
  • Private Placement: Issue of 244,898,000 to 249,377,000 new units to institutional, accredited, and other investors at an issue price between S\$2.406 and S\$2.450 per unit, targeting gross proceeds of at least S\$600 million.
  • Non-Renounceable Preferential Offering: Issue of new units to eligible unitholders at an issue price between S\$2.35 and S\$2.40 per unit, aiming to raise approximately S\$300 million. The allotment ratio will be announced after the issue price is determined.
• Pricing Discounts: Both tranches are offered at discounts to the recent volume weighted average price (VWAP). Private Placement is 2.5%–4.2% below VWAP (S\$2.5126), and the Preferential Offering is 4.5%–6.5% below VWAP, providing attractive entry points for investors.
• Purpose of Fund Raising: Proceeds will be primarily used to finance recent and upcoming property acquisitions in Singapore, the US, Spain, and Japan, as well as to strengthen the REIT’s balance sheet and financial flexibility.
• Potential Impact on Shareholders: The equity fund raising will enlarge the unitholder base, increase trading liquidity, and is expected to result in distribution per unit (DPU) accretion of up to 4.3% on a pro forma basis, assuming all acquisitions complete.
• Leverage Impact: Aggregate leverage is expected to decrease from approximately 39.0% to 34.5% immediately after the equity fund raising (pending deployment of proceeds), enhancing balance sheet strength.

Strategic Use of Proceeds

The S\$900 million in gross proceeds will be deployed as follows:

• S\$113.6 million (12.6%) to partly finance three Singapore portfolio acquisitions (2 Pioneer Sector 1, Tuas Connection, and 9 Kallang Sector).
• S\$57.9 million (6.4%) for the acquisition of DHL Canal Winchester, a Class A logistics property in Ohio, USA.
• S\$108.6 million (12.1%) for the acquisition of six logistics properties in Spain.
• S\$214.8 million (23.9%) for a logistics estate at 25 Loyang Crescent, Singapore.
• S\$93.5 million (10.4%) for a 50% interest in Ascent, a business park in Singapore Science Park 1.
• S\$188.3 million (20.9%) for a 49% interest in a data centre in Greater Osaka, Japan.
• S\$30.4 million (3.4%) for a potential industrial asset in Singapore (currently under due diligence).
• S\$82.2 million (9.1%) for a potential ramp-up logistics facility in Singapore (also under due diligence).
• S\$10.7 million (1.2%) for estimated fees and expenses related to the placement and offering.

Any balance will be used for general corporate and/or working capital purposes. If any of the acquisitions do not proceed, the net proceeds may be used at the Manager’s discretion for other purposes, including debt repayment or future acquisitions.

Key Details for Shareholders

• Preferential Offering Entitlement: The offering is non-renounceable and will be made on a pro rata basis to eligible unitholders as of 5.00 p.m. on 1 April 2026 (“Record Date”). Fractions of units will be disregarded.
• Excess Application: Eligible unitholders may apply for excess units above their allotments, with preference given to rounding odd lots. Directors and substantial unitholders with influence over the REIT will rank last for odd lot rounding and excess allotments.
• Eligibility Restrictions: The offerings are not open to investors in the United States, European Economic Area, UK (except eligible UK investors), Hong Kong, Thailand, Malaysia, Canada, Japan, or Australia. Other restrictions apply to foreign investors; only those with Singapore addresses or who satisfy certain regulatory conditions may participate.
• Support from Major Shareholders: CLI RE Fund Investments Pte. Ltd. (CLIRE), holding 16.91% of units, and CapitaLand Ascendas REIT Management Limited (CLARML), holding 0.06%, have both provided irrevocable undertakings to take up their full entitlements.
• Unit Status: The new units will not be entitled to the “Advanced Distribution” (for the period 1 Jan 2026 to 1 Apr 2026, estimated at 3.75 Singapore cents per unit). Private Placement Units will not be eligible to participate in the Preferential Offering, but both new tranches will rank pari passu in all other respects with existing units after issue.
• Listing: Private Placement Units are expected to begin trading on 2 April 2026; Preferential Offering Units on 23 April 2026.
• Regulatory Approvals: The Singapore Exchange (SGX-ST) has granted in-principle approval for the listing, subject to compliance with various listing rules and confirmation of financial resources by major undertaking unitholders.

Potential Price-Sensitive Factors

• Enlargement of Unit Base: At least 369,420,711 new units will be issued, increasing the total units in issue by at least 8%. This is likely to boost trading liquidity and could impact the unit price in the short term.
• DPU Accretion: The acquisitions funded by this exercise are expected to be DPU accretive, with an estimated 4.2%–4.3% increase on a pro forma basis. This may positively influence investor sentiment and share price.
• Strengthened Balance Sheet: If proceeds are initially used to repay debt, CLAR’s leverage could fall to 34.5%, providing more financial flexibility and potentially supporting future acquisitions or returns to shareholders.
• Potential Dilution: The increase in units in issue will result in dilution of existing holdings for unitholders who do not participate in the Preferential Offering.
• Execution Risks: If some potential acquisitions do not complete, the manager may reallocate proceeds, including for debt repayment or other investments, which could affect the expected DPU accretion or growth profile.
• Previous Fund Raising: The report notes a previous S\$500 million private placement in May 2025, with proceeds fully utilised for property acquisitions and debt repayment, reflecting CLAR’s ongoing growth and capital management strategy.

Indicative Timetable

Conclusion

This substantial equity fund raising, the largest in recent years for CLAR, is a strategic move to fund multiple accretive acquisitions, enhance balance sheet strength, and offer existing unitholders an opportunity to participate in the REIT’s growth. The DPU accretion, leverage reduction, and international portfolio expansion are likely to be positively received by the market, though the potential dilution and execution risks warrant careful monitoring by investors.

Shareholders should review the eligibility criteria, consider taking up their entitlements, and closely monitor further announcements regarding the final issue prices, allotment ratios, and completion of the underlying acquisitions.

Disclaimer: This article is for informational purposes only and does not constitute an offer, invitation, or solicitation to buy or sell any securities. The information is based on a company announcement and may be subject to change. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The past performance of CLAR is not necessarily indicative of future performance. The value of units and income derived from them may fall as well as rise, and investors may lose all or part of their investment. This article does not take into account your specific investment objectives, financial situation, or needs.

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