Out of the 5 CapitaLand REITs and business trusts listed on the Singapore Exchange, I am currently invested in 3 – CapitaLand Ascendas REIT, CapitaLand India Trust, and CapitaLand Integrated Commercial Trust.

Both CapitaLand India Trust and CapitaLand Integrated Commercial Trust have released their business updates last Thursday (24 April) and Friday (25 April) respectively, and you can check out my reviews below (if you’ve missed them):

Earlier this evening (28 April), CapitaLand Ascendas REIT (SGX: A17U), or CLAR, released its business update for 1Q FY2025 ended 31 March.

For those of you who are new to the Singapore-listed REIT, it is the country’s first and largest business space and industrial REIT, where its portfolio currently comprises 225 properties in Singapore, Australia, the United States, as well as in the United Kingdom/Europe, valued at S$16.8 billion as of 31 December 2024.

One of the notable updates surrounding CLAR in recent months is the completion of the S$883 million redevelopment of 1 Science Park Drive (comprising of 3 buildings in 1, 1A, and 1B Science Park Drive), to which the REIT has a 34% stake in (with CapitaLand Development owning the remaining 66% stake). The property obtained Temporary Occupation Permit (TOP) on 03 March 2025. As of 01 April 2025, 76% of the net lettable area has been committed, with another 19% of space in advanced negotiations.

In this post, you’ll find my review of CLAR’s portfolio occupancy and debt profile (in case you’re wondering, the REIT did not provide any updates on its financial performances this time round; also, as the management pays out a distribution on a half-yearly basis, hence there are no distributions declared this time round):

Portfolio Occupancy (4Q FY2024 vs. 1Q FY2025)

In the table below, you will find a comparison of CLAR’s portfolio occupancy reported for the current quarter under review (i.e., 1Q FY2025 ended 31 March 2025) against that reported in the previous quarter 3 months ago (i.e., 4Q FY2024 ended 31 December 2024) to find out if it has continued to remain strong (for information, the REIT has a track record of maintaining its portfolio occupancy at above 90%):

4Q FY20241Q FY2025
Portfolio Occupancy
(%)		92.8%91.5%
Rental Reversion
(%)		+8.6%+11.0%
Portfolio WALE
(years)		3.7 years3.8 years

A slight negative can be seen in its portfolio occupancy, where it dipped by 1.3 percentage points (pp) to 91.5%, as a result of slight declines in the occupancy rates of its properties in all of the various geographical locations they are in, as follows:

  • Singapore (from 92.5% in 4Q FY2024 to 91.6% in 1Q FY2025)
  • United States (from 88.9% in 4Q FY2024 to 88.0% in 1Q FY2025)
  • Australia (from 92.5% in 4Q FY2024 to 89.2% in 1Q FY2025)
  • United Kingdom/Europe (from 99.3% in 4Q FY2024 to 98.9% in 1Q FY2025)

Another thing to note is that, the occupancy rates of its properties in 2 of the locations (i.e., United States and Australia) fell slightly under 90%.

However, rental reversion for CLAR for 1Q FY2025 has not only remained in positive percentages, but it has also improved.

In terms of lease expiries, they are well-staggered, with 12.6% of the leases due for renewal in the remaining 3 quarters of FY2025, an average of 17.8% of the leases due for renewal each year over the next 3 years (between FY2026 and FY2028), with the remaining 34% of the leases due for renewal in FY2029 or later.

Debt Profile (4Q FY2024 vs. 1Q FY2025)

When it comes to reviewing a REIT’s debt profile, my preference is to compare the statistics reported for the current quarter against that reported in the previous quarter 3 months ago, just like how I review its portfolio occupancy profile.

In the table below, you’ll find a comparison of CLAR’s debt profile reported for 1Q FY2025 against that reported for 4Q FY2024, to find out if it has continued to remain at healthy levels (for information, CLAR has managed to consistently maintain its aggregate leverage at under 40%, which is a healthy level):

4Q FY20241Q FY2025
Aggregate Leverage
(%)		37.7%38.9%
Interest Coverage
Ratio (times)		3.6x3.6%
Average Term to Debt
Maturity (years)		3.5 years3.1 years
Average Cost of
Debt (%)		3.7%3.6%
% of Borrowings Hedged
to Fixed Rates (%)		82.7%73.6%

Apart from a slight increase in its aggregate leverage (up by 1.2pp to 38.9% – but even at this level, it is still a very healthy headroom to the regulatory limit of 50%), most of the other statistics when compared against that reported in the previous quarter remained stable. Particularly, I noticed a gradual decline in its average cost of debt in the recent few quarters, from 3.8% in 1Q FY2024 down to about 3.6% in 1Q FY2025.

Debt maturity is also well-spread out, with about 15% of borrowings due for refinancing in the remaining 3 quarters of FY2025, about 14% of borrowings due for refinancing each year over the next 5 years (between FY2026 and FY2030), with the remaining 13% of borrowings only due for refinancing in FY2031 or later.

Closing Thoughts

In my opinion, CLAR’s latest portfolio occupancy and debt profile was a mixed bag.

To recap, for its portfolio occupancy, it dipped slightly to 91.5%, with the occupancy rates of its properties in the United States and Australia falling to slightly under 90%. On the other hand, the REIT managed to record a positive rental reversion (at +11.0%) for new and/or renewed leases in the quarter – particularly, the rental reversion for its leases its logistics properties Australia was at a high of +59%!

On its debt profile, while its aggregate leverage inched up slightly to 38.9% (which is a small negative), but I’m not concerned, as its still a healthy distance away from the regulatory limit of 50%. However, its average cost of debt has slowly declined from 3.8% in 1Q FY2024 to 3.6% in 1Q FY2025.

With that, I have come to the end of my review of CLAR’s latest business update for the 1st quarter of FY2025. Do note that all the opinions in this post are purely mine which I’m sharing for educational purposes only, and they are not meant as any buy or sell calls for the REIT’s units. You should always do your own due diligence before you make any investment decisions.

Related Documents

Disclaimer: At the time of writing, I am a unitholder of CapitaLand Ascendas REIT.

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