Listed on the Singapore Exchange since November 2002, and subsequently included to become one of the constituents of the benchmark Straits Times Index, CapitaLand Ascendas REIT (SGX: A17U) is the country’s first and largest-listed business space and industrial REIT, with its investment focus on technology and logistics properties in developed markets.
As of 31 December 2024, CapitaLand Ascendas REIT’s (CLAR) portfolio comprises 229 properties across 3 segments (business space and life sciences, industrial and data centres, as well as logistics) in Singapore, the United States, Australia, and in the United Kingdom/Europe, with a total properties under management at about S$16.8 billion.
In terms of the level of concentration in each of the geographical locations, about 60% of its properties are in Singapore, with the remaining 40% of its properties overseas.
CLAR is also the last of the trio of CapitaLand REITs and business trust I have in my investment portfolio to release its results for the 2nd half, as well as for the full year ended 31 December 2024 (i.e., FY2024) earlier this evening (06 February) – with the first being CapitaLand India Trust last Monday (27 January), and the second being CapitaLand Integrated Commercial Trust yesterday morning (05 February), and you can find my reviews via the respective links below:
- CapitaLand India Trust’s 4Q & FY2024 Results Review
- CapitaLand Integrated Commercial Trust’s 2H & FY2024 Results Review
In this post, you will find my review of CLAR’s latest financial performance, portfolio occupancy and debt profile, as well as its distribution payout to unitholders:
Financial Performance (2H FY2023 vs. 2H FY2024, and FY2023 vs. FY2024)
In this section, you’ll find a review of CLAR’s financial performance for the 2nd half of FY2024 as well as for FY2024, compared against that reported in the respective time periods a year ago:
2H FY2023 vs. 2H FY2024:
| 2H FY2023 | 2H FY2024 | % Variance | |
| Gross Revenue (S$’mil) | $761.7m | $753.0m | -1.1% |
| Property Operating Expenses (S$’mil) | $247.3m | $231.4m | -6.4% |
| Net Property Income (S$’mil) | $514.3m | $521.5m | +1.4% |
| Distributable Income to Unitholders (S$’mil) | $326.9m | $338.0m | +3.4% |
My Observations: It was a slight negative as far as CLAR’s financial results for the 2nd half of the year is concerned – with gross revenue dipping by 1.1% year on year to S$753.0m, which can be attributed to the absence of revenue contribution from 3 Australia logistics properties which were divested in February 2024, as well as 1 Singapore logistics property which was divested in November 2024. This was on top of the absence of income contribution from 2 properties that were being decommissioned – 5 Toh Guan Road East in November 2023, and Welwyn Garden City (in the United Kingdom) in June 2024.
Property operating expenses fell by 6.4% year on year to S$231.4 million mainly due to lower property tax expenses, along with divestments and property decommissions. This led to the REIT’s net property income recording a 1.4% year on year growth to S$521.5 million.
Finally, CLAR’s distributable income to unitholders saw a 3.4% year-on-year improvement to S$338.0 million due to higher net property income, and lower interest expense (which fell by 1.9% year on year).
FY2023 vs. FY2024:
| FY2023 | FY2024 | % Variance | |
| Gross Revenue (S$’mil) | $1,479.8m | $1,523.0m | +2.9% |
| Property Operating Expenses (S$’mil) | $456.6m | $473.1m | +3.6% |
| Net Property Income (S$’mil) | $1,023.2m | $1,049.9m | +2.6% |
| Distributable Income to Unitholders (S$’mil) | $654.4m | $668.8m | +2.2% |
My Observations: CLAR’s financial results for FY2024 compared to last year was a stable one, with its gross revenue, net property income, and distributable income all recording a low single-digit percentage improvement.
For the 2.9% and 2.6% year-on-year growth in its gross revenue and net property income to S$1,523 million and S$1,049.9 million respectively, they can be attributed to full year contribution from newly acquired properties in 2023 (namely 1 Buroh Lane and The Shugart in Singapore, as well as The Chess Building in the United Kingdom), as well as the completion of development of properties in 2023 (namely MQX4 in Australia and the convert-to-suit project of 6055 Lusk Boulevard in the United States).
However, this was partially offset by 2 properties that were decommissioned (Welwyn Garden City [in the United Kingdom] in June 2024, and 5 Toh Guan Road East in November 2023), and 4 properties that were divested (77 Logistics Place, 62 Sandstone Place, and 92 Sandstone Place in Australia which were divested in February 2024, and KA Place in Singapore which was divested in May 2023).
As a result, CLAR’s distributable income to unitholders for FY2024 saw a 2.2% increase compared to last year at S$668.8 million.
Portfolio Occupancy Profile (3Q FY2024 vs. 4Q FY2024)
There are 2 things I particularly fancy about CLAR’s portfolio occupancy profile in the recent quarters – first is its high portfolio occupancy rate (which has been consistently maintained at above 90%), and second is its double digit rental reversion attained (and this aids in the continued growth in the REIT’s financial performance, as well as its distribution payouts).
Has CLAR managed to repeat this feat this quarter?
Let us find out in the table below, where you’ll find a comparison of its portfolio occupancy profile reported for the current quarter under review (i.e., 4Q FY2024 ended 31 December 2024) against that reported for the previous quarter 3 months ago (i.e., 3Q FY2024 ended 30 September 2024):
| 3Q FY2023 | 4Q FY2024 | |
| Portfolio Occupancy (%) | 92.1% | 92.8% |
| Rental Reversion (%) | +14.4% | +8.6% |
| Portfolio WALE (years) | 3.7 years | 3.7 years |
My Observations: Portfolio occupancy improved by 0.7 percentage points (pp) to 92.8%, from improvements in the occupancy of its properties in Singapore (up from 92.0% in 3Q FY2024 to 92.5% in 4Q FY2024), United States (up from 87.1% in 3Q FY2024 to 88.9% 4Q FY2024), and Australia (up from 91.7% in 3Q FY2024 to 92.5% in 4Q FY2024.
As far as lease renewals for the 4th quarter is concerned, all the properties in the different geographical locations (Singapore, United States, Australia, and United Kingdom) saw positive rental reversions ranging from +6.6% to +11.6% – which is good to note, as this will help in the REIT’s financial performances in the coming quarters.
Top 10 tenants contributed about 16.2% towards the REIT’s gross revenue, with its top tenant (in SingTel) contributing 3.1%.
Debt Profile (3Q FY2024 vs. 4Q FY2024)
CLAR also boast a healthy debt profile, with its aggregate leverage maintained at under 40% over the quarters, as well as having a high percentage (80% or higher) of its borrowings hedged at fixed rates (and this helped to mitigate some of the impacts of the rising interest rate environment a few years back).
Just like how I have did a comparison of its portfolio occupancy profile in the previous section, in the table below, you’ll find CLAR’s debt profile for the current quarter (i.e., 4Q FY2024 ended 31 December 2024) compared against the previous quarter 3 months ago (i.e., 3Q FY2024 ended 30 September 2024):
| 3Q FY2024 | 4Q FY2024 | |
| Aggregate Leverage (%) | 38.9% | 37.7% |
| Interest Coverage Ratio (times) | 3.7x | 3.6x |
| Average Term to Debt Maturity (years) | 3.3 years | 3.5 years |
| Average Cost of Debt (%) | 3.7% | 3.7% |
| % of Borrowings Hedged to Fixed Rates (%) | 80.2% | 82.7% |
My Observations: Compared to the previous quarter, CLAR’s debt profile is more or less the same, apart from a slight 1.2pp decline in its aggregate leverage to 37.7% (which is a very healthy level in my opinion), and a 2.5pp increase in its percentage of borrowings hedged to fixed rates, at 82.7%.
In terms of debt maturity, it is very well-spread out, with about 13-14% of borrowings due for refinancing each year over the next 3 financial years (i.e., FY2025-FY2027), and 57% of its borrowings only due for refinancing in FY2028 or later.
Distribution Payout to Unitholders
The management of CLAR declares a distribution payout to the unitholders on a half-yearly basis (just like the other CapitaLand REITs and business trusts).
In the following 2 tables, you’ll find the distribution payouts declared for the 2nd half of FY2024 (for the period between 1 July and 31 December 2024), as well as for FY2024 (for the period between 1 January and 31 December 2024), compared against the distribution payouts declared in the respective time periods a year ago:
2H FY2023 vs. 2H FY2024:
| 2H FY2023 | 2H FY2024 | % Variance | |
| Distribution Per Unit (S$’cents) | 7.441 cents | 7.681 cents | +3.2% |
The improvements in the REIT’s distribution per unit was due to full-year contribution from properties acquired and completed in FY2023, along with the portfolio’s robust operational performance.
FY2023 vs. FY2024:
| FY2023 | FY2024 | % Variance | |
| Distribution Per Unit (S$’cents) | 15.160 cents | 15.205 cents | +0.3% |
If you are a unitholder of CLAR, do take note of the following dates on its distribution payouts:
Ex-Date: 13 February 2025
Record Date: 14 February 2025
Payout Date: 11 March 2025
CEO Mr William Tay’s Comments & Outlook (from the REIT’s Press Release)
“The stable DPU of 15.205 cents is a testament to the resilient income stream of CLAR’s good quality assets spread across four developed markets. CLAR’s strong and well-balanced portfolio has been built up over the years through our disciplined investment approach together with an effective capital management strategy. We will continue to leverage our strong financial position and asset management expertise to navigate market conditions and deliver returns for Unitholders.”
Closing Thoughts
Apart from a slight year-on-year dip in the REIT’s gross revenue in 2H FY2024 due to the absence of contribution from properties that were divested or decommissioned, it was a good set of results reported by CLAR – particularly in terms of year-on-year improvements in its distribution payout to unitholders for the 2H FY2024 (by 3.2% to 7.681 cents/unit, from full-year contributions by properties acquired in 2023, as well as completed), and also for the full year (by 0.3% to 15.205 cents/unit).
Portfolio occupancy was also at a very high level of 92.8% as of 31 December 2024 – apart from its properties in the United States (which had an occupancy of 88.9%), its properties in Singapore, Australia, as well as in the United Kingdom had occupancy rates of above 90%. On top of that, new and/or renewed leases in all the geographical locations continued to be at positive levels for the quarter.
Last but not least, CLAR’s debt profile is a very healthy one, with its aggregate leverage at 37.7%, and debt maturity was also very well-spread out – where over the next 3 financial years, it has about 13-14% of borrowings due for refinancing each year.
With that, I have come to the end of my review of CLAR’s latest results for the 2nd half, as well as for the full year ended 31 December 2024. Do note that all the opinions expressed in this post are purely mine which I’m sharing for educational purposes only. They are not meant as any buy or sell calls for the REIT’s units. You should always do your own due diligence prior to making any investment decisions.
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Disclaimer: At the time of writing, I am a unitholder of CapitaLand Ascendas REIT.
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