CapitaLand Ascendas REIT Makes S\$565.8 Million Move: Major Singapore Industrial Acquisitions Set Stage for 2025 Growth

Key Highlights of the Announcement

• Acquisition of Three Prime Industrial and Logistics Properties in Singapore for S\$565.8 Million
• Portfolio Expansion in 2025 Reaches S\$1.3 Billion in Investments
• Properties are Fully Occupied with Strong Tenancy Profile and Rental Upside Potential
• Expected DPU Accretion and Attractive NPI Yield
• Proposed Acquisitions to be Completed by 1Q 2026
• Strategic Locations Near Key Infrastructure and CBD
• Discounted Acquisition Price Relative to Independent Valuation

Detailed Analysis for Investors

1. Major Strategic Acquisitions in Singapore

CapitaLand Ascendas REIT (CLAR) has announced a major acquisition of three high-quality industrial and logistics properties in Singapore from Vita Partners for approximately S\$565.8 million. The portfolio comprises:

• 2 Pioneer Sector 1: A ramp-up logistics property completed in 2023, featuring state-of-the-art facilities including high ceilings, ample dock levellers, and strong floor loading capacity.
• Tuas Connection: A light industrial property comprising 15 double-storey units suitable for manufacturing and production, with private compounds and efficient layouts.
• 9 Kallang Sector: A modern, high-specifications eight-storey industrial property completed in 2019, currently leased to a German-headquartered technology firm (a subsidiary of a major American multinational).

These properties are located in the well-established Jurong Industrial Estate and Kallang Planning Area, both crucial industrial and logistics hubs close to Changi Airport, major seaports, and expressways.

2. Impact on Portfolio and Strategic Positioning

These acquisitions will boost the value of CLAR’s Singapore portfolio to approximately S\$12.3 billion, representing 68% of its total assets under management. This firmly anchors CLAR’s position as a Singapore-focused REIT, with the properties expected to enhance both the scale and resilience of its income stream.

The acquisition follows recent purchases of a Tier III colocation data centre and a premium business space property, completed in August 2025, signalling a robust growth trajectory for CLAR in 2025, with total investments reaching S\$1.3 billion.

3. Strong Lease Profile and Potential for Rental Upside

The target properties are fully occupied by 19 tenants—mainly publicly listed companies and MNCs from the technology, logistics, precision engineering, electronics, and life sciences sectors. The properties offer a long weighted average lease expiry (WALE) of 5.5 years and built-in annual rental escalations (1% to 5%), with current in-place rents approximately 15% below prevailing market rates. This implies significant potential for rental income growth as leases are renewed or reviewed.

4. DPU Accretion and Attractive Yield

The acquisition is expected to be accretive to shareholders, with a projected net property income (NPI) yield of 6.4% (pre-transaction costs) and 6.1% (post-transaction costs). The pro forma impact indicates a DPU (Distribution Per Unit) accretion of 0.124 Singapore cents, or 0.8%, based on the financial year ended 31 December 2024. This is a critical point for income-focused investors, as it directly supports future payout potential.

5. Attractive Purchase Terms and Funding Structure

The purchase price of S\$565.8 million was negotiated at a 3.9% discount to the independently assessed market value of S\$589.0 million. The total investment cost, including acquisition fees, stamp duty, and related expenses, comes to S\$592.6 million. Funding will come from a mix of internal resources and existing debt facilities, suggesting manageable impact on leverage.

6. Potential Price-Sensitive and Shareholder-Relevant Issues

• Significant Portfolio Expansion: The scale of these acquisitions, combined with recent deals, marks one of the largest investment surges in recent years for CLAR.
• DPU Accretion: The forecasted improvement in DPU is price-sensitive and could positively influence share performance, given the REIT’s yield-driven investor base.
• Rental Reversion Upside: With in-place rents 15% below market, there is a clear pathway to higher future income and NAV improvement.
• Discounted Acquisition Price: Acquiring at a discount to independent valuation provides a margin of safety and potential for capital appreciation.
• Resilient and Diversified Tenant Base: Reduces risk of income volatility and supports long-term stability.

7. Property and Tenant Details

Conclusion

This acquisition underscores CapitaLand Ascendas REIT’s aggressive growth strategy in Singapore’s industrial and logistics real estate sector, with a focus on resilience, yield, and value creation. The DPU accretion, attractive NPI yield, and robust tenant profile are all potentially positive catalysts for the REIT’s share price. Investors should monitor the progress toward completion (targeted for 1Q 2026), funding arrangements, and subsequent financial disclosures for further impact on valuations.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Please consult your financial advisor before making any investment decisions. Forward-looking statements are subject to risks and uncertainties and actual outcomes may differ materially from those expressed herein.

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