Excerpt from CGS International report.

Report Summary

• CapitaLand Ascott Trust (CLAS) reported FY25 DPS of 6.10 Scts, maintaining its stable distribution guidance, with slight retention of working capital to support future asset enhancement initiatives.
• Portfolio performance was strong, with occupancy rising to 80% and RevPAU (revenue per available unit) growing 3% year-on-year, supported by improved operating metrics in Singapore, US, Australia, Japan, and France.
• Minor challenges were noted in the US student accommodation segment due to supply headwinds, but management expects recovery and positive RevPAU growth in key markets for FY26.
• CLAS is executing asset enhancement projects, including The Cavendish London and redevelopment of Somerset Liang Court, and maintains a competitive cost of debt at 2.9%.
• Dividend yield for FY26F is projected at 6.2%, with a DDM-based target price of S\$1.13 and an “Add” rating, indicating an expected total return above 10% over 12 months.
• ESG performance is strong: CLAS is best-in-class within its peer group, aiming for 100% green certification of its properties by 2030 and aligning with CapitaLand’s sustainability targets.
• Key risks include foreign exchange volatility and potential slowdowns in global travel demand, while faster-than-expected asset enhancement completions could drive re-rating.
• CLAS’s balance sheet remains healthy, with prudent capital management, a solid pipeline of asset enhancements, and a focus on operational efficiency and sustainability.

Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com