CapitaLand Ascendas REIT Announces Strategic S\$1.4 Billion Acquisitions Across Singapore and Japan

Major Expansion in Logistics, Business Space, and Data Centre Sectors to Drive Growth and Enhance Portfolio Quality

CapitaLand Ascendas REIT (CLAR) has unveiled a suite of transformative acquisitions totaling approximately S\$1.4 billion, marking a significant step in its portfolio rejuvenation strategy. These acquisitions span three high-quality assets: a 100% interest in a logistics asset in Singapore (25 Loyang Crescent), a 50% interest in a prime business space property in Singapore (Ascent, 2 Science Park Drive), and a 49% interest in a Tier III hyperscale data centre in Greater Osaka, Japan.

Key Details of the Acquisitions

• 25 Loyang Crescent, Singapore (Logistics)
  • Purchase Price: S\$504.2 million (2.7% below valuation)
  • Type: Modern ramp-up logistics and industrial complex with 13 standalone buildings and a four-storey logistics facility
  • Total Acquisition Cost: S\$536.9 million (including S\$32.7 million in fees)
  • Occupancy: 100%
  • WALE: 13.4 years with built-in 2.5% annual rent escalation
  • Master Lessee: Toll Offshore Petroleum Services
  • Initial NPI Yield: 6.9% (6.4% post-transaction costs)
  • Estimated Completion: Q3 2026
  • Remaining land lease tenure: 27.7 years
• Ascent, 2 Science Park Drive, Singapore (Business Space)
  • Purchase Price: S\$245.0 million for 50% interest (1.7% below valuation, includes S\$15 million deferred consideration payable within 15 months post-completion)
  • Total Acquisition Cost: S\$261.0 million
  • Valuation: S\$498.5 million (100% basis)
  • Occupancy: 90.7%
  • WALE: 2.4 years
  • Key Tenants: Johnson & Johnson, Dyson, Merck
  • Initial NPI Yield: 5.6% (5.2% post-transaction costs)
  • Completion Date: 23 March 2026
  • Land Lease Tenure: 55.5 years remaining
  • BCA Green Mark Platinum certified
• Japan Data Centre, Greater Osaka (Data Centre)
  • Purchase Price: S\$620.7 million for 49% interest (2.6% below valuation)
  • Total Acquisition Cost: S\$627.6 million
  • Valuation: S\$1,299 million (100% basis)
  • Occupancy: 100%
  • WALE: 14.2 years with 1.0% built-in annual rent escalation
  • Key Tenant: A global investment grade hyperscaler
  • Initial NPI Yield: 4.3% (4.2% post-transaction costs)
  • Estimated Completion: Q2 2026
  • Freehold property completed in 2023, IT capacity of 40.5MW (with 5.4MW expansion potential)
  • Co-investor: Fund managed by Mitsui & Co subsidiary holds 51%

Strategic Rationale and Potential Price Sensitive Factors

1. Strengthening Singapore Core:
   • CLAR’s portfolio remains anchored in Singapore, with 66-67% of total AUM post-acquisitions.
   • These acquisitions further solidify CLAR’s leadership in Singapore’s high-spec logistics and business space sectors, notably at Science Park, a key technology and R&D hub with over 350 MNCs and leading tech firms.
2. Expanding Data Centre Exposure in Developed Markets:
   • The Japan Data Centre acquisition marks CLAR’s strategic entry into Asia Pacific’s largest data centre market outside China, with strong growth prospects driven by hyperscale and cloud demand.
   • Modern data centre assets rise to 43% of CLAR’s data centre portfolio, with a total value of S\$2.6 billion spanning six developed countries.
   • This positions CLAR to benefit from rapid IT capacity growth in Japan (24% CAGR expected from 2025-2030), rising occupancy rates, and constrained supply in Osaka.
3. Enhancing Portfolio Quality and Income Stability:
   • All three assets are fully or highly occupied and anchored by blue-chip tenants, offering long WALEs (up to 14 years) and built-in annual rent escalations (1.0–2.5%).
   • Portfolio WALE remains strong at 3.7 years post-acquisition, with overall occupancy at 90.9%.
   • Potential for organic growth through rent escalation and expansion (e.g., untapped plot ratio in Loyang, capacity expansion in Osaka).
4. DPU-Accretive and Attractive NPI Growth:
   • Combined NPI for FY2025 is projected to rise by 12.0% to S\$1,195 million post-acquisitions.
   • Distribution per Unit (DPU) is expected to increase by 4.1% to 15.616 Singapore cents (excluding deferred consideration), providing immediate value accretion for unitholders.
   • Acquisitions are executed at attractive NPI yields (4.3-6.9%) and below market valuation, enhancing return on investment.
5. Healthy Balance Sheet and Leverage:
   • Aggregate leverage is expected to remain healthy at ~40%, leaving headroom for future growth and supporting a robust capital structure.
   • The manager is also exploring further acquisitions, which may be price sensitive if materialise.
6. Sector and Tenant Diversification:
   • Post-acquisition, the logistics and data centre segments will account for 27% and 13% of AUM respectively, strengthening CLAR’s presence in these high-growth sectors.
   • Tenant base remains diversified, with over 70% of rental income from technology, logistics, and biomedical sciences sectors.

Other Noteworthy Points for Investors

• All three acquisitions are expected to be completed by 2Q-3Q 2026, with associated acquisition fees and deferred considerations highlighted for transparency.
• All assets were acquired at a discount to independent valuations (1.7% to 3.3%), potentially offering immediate portfolio uplift.
• CLAR’s commitment to sustainability is reflected in certifications such as BCA Green Mark Platinum and TRUE certification for resource efficiency.
• Investors should note that future performance remains subject to market risks and that unitholders have no redemption rights while units are listed.

Conclusion

These strategic, accretive acquisitions position CapitaLand Ascendas REIT for sustained growth, greater income stability, and a strengthened global platform anchored in Singapore. With attractive yields, increased scale, and exposure to key secular trends in logistics and data centres, the news is likely to be price sensitive and could positively impact CLAR’s share value.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice or a solicitation to buy or sell any securities. The information is derived from the company’s public disclosures and may contain forward-looking statements subject to risks and uncertainties. Actual results may differ materially from those indicated. Investors are advised to consult their own professional advisers before making investment decisions.

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