Out of the 5 REITs and business trusts sponsored by CapitaLand Investment Limited, 2 are constituents of Singapore’s benchmark Straits Times Index (STI), and they are – CapitaLand Ascendas REIT, as well as CapitaLand Integrated Commercial Trust (and I happen to have investments in both, along with CapitaLand India Trust at the time of writing).

Both CapitaLand Integrated Commercial Trust, as well as CapitaLand India Trust have released their business updates for 3Q & 9M FY2025 (the former last Tuesday, 28 October, and the latter last Friday, 31 October), and you can find my reviews via the respective links below:

The final of the trio of CapitaLand REITs and business trust in my investment portfolio, CapitaLand Ascendas REIT (SGX: A17U), or CLAR for short, also released its business update for the 3rd quarter, as well as for the first 9 months of FY2025 ended 30 September, last Friday (31 October) evening.

If this is the first time you’re coming across this Singapore-listed REIT, here’s a quick introduction – listed on the Singapore Exchange in November 2002, CLAR is the country’s first and largest business space and industrial REIT, where its investment focus is on technology and logistics properties in developed markets. Currently, its portfolio comprises 228 properties in the business space and life sciences, industrial and data centres, as well as logistics segments located in Singapore, the United States, Australia, and in the United Kingdom/Europe, valued at S$17.7 billion.

Since its last quarterly results release (for the 2nd quarter and for the 1st half of FY2025) in early-August (you can check out my review here), it has completed its acquisition of 5 Science Park Drive and 9 Tai Seng Drive in early-August, announced the acquisition of 2 industrial (2 Pioneer Sector 1 and 9 Kallang Sector) and 1 logistics (Pioneer Sector 1) property in Singapore in early-October, embarked on its first logistics development comprising of 4 new logistics properties in the United Kingdom (also in early-August), together with the divestment of 5 properties in Singapore (31 Ubi Road 1, 9 Changi South Street 3, 10 Toh Guan Road, 19 & 21 Pandan Avenue, and 30 Tampines Industrial Avenue 3) in mid-August – looking at the number of transactions, the REIT has certainly been very active in divesting mature properties, and recycling the capital into higher-yielding ones.

In this post, you’ll find my review of CLAR’s latest portfolio occupancy and debt profile (there aren’t any reviews of financial figures as the REIT reports them only on a half-yearly basis; the same can also be said for distributions, where the REIT’s management has a semi-annual distribution payout policy):

Portfolio Occupancy Profile (2Q FY2025 vs. 3Q FY2025)

Looking back at the occupancy rates of its properties for 2Q FY2025, where, apart from the United States (with an occupancy of 87.3%), the remaining locations (Singapore, Australia, the United Kingdom/Europe) saw its properties having an occupancy rate of at least 90%. Rental reversions were also positive (ranging between +3.5% and +10.9%), which will help to bolster a stable growth in its financial figures.

For the 3rd quarter, is it still as such? Let us have a look at it in the table below, where you’ll find a comparison of CLAR’s portfolio occupancy profile reported for 3Q FY2025 (ended 30 September) against that reported in the previous quarter 3 months ago (i.e., 2Q FY2025 ended 30 June):

2Q FY20253Q FY2025
Portfolio Occupancy (%)91.8%91.3%
Portfolio WALE (by Gross Revenue) (years)3.7 years3.6 years
Rental Reversion (%)+8.0%+7.6%

Portfolio occupancy fell slightly by 0.5 percentage points (pp) to 91.3% as a result of a dip in the occupancy rates of its properties in all the geographical locations except for Australia (where its occupancy rate rose from 93.1% in 2Q FY2025 to 94.8% in 3Q FY2025, due to improvements in its logistics portfolio).

For Singapore, its occupancy inched down from 91.2% in 2Q FY2025 to 90.4% in 3Q FY2025 mainly due to the addition of 5 Toh Guan Road East which completed redevelopment in September (where the property’s current occupancy rate was at 52%, with an additional 13% in advanced negotiations); for the United States, its occupancy rate decreased from 87.3% in 2Q FY2025 to 85.3% in 3Q FY2025 mainly due to lower occupancy in Raleigh; and finally, for the United Kingdom/Europe, occupancy edged down from 98.9% in 2Q FY2025 to 98.8% in 3Q FY2025.

Despite some weakness seen in the REIT’s occupancy rates in its properties, but they are all remained at high levels, where they are at above 91% (with the except of the occupancy rates of the properties in the United States, which is at around the mid-80% level) – which I consider to be very strong (in my opinion).

Rental reversions for new and/or renewed leases signed in the quarter, with the exception of the data centres in United Kingdom/Europe (which was at -2.5%), were all in positive percentages, ranging from +5.9% and +24.5%.

Debt Profile (2Q FY2025 vs. 3Q FY2025)

CLAR’s debt profile over the quarters has been healthy too – with its aggregate leverage maintained at under 40%.

Here is a comparison of the REIT’s debt profile reported for the 3rd quarter of FY2025 against that reported for the 2nd quarter of FY2025:

2Q FY20253Q FY2025
Aggregate Leverage (%)37.4%39.8%
Interest Coverage Ratio (times)3.7x3.6x
Average Cost of Debt (%)3.7%3.6%
Average Term to Debt Maturity (years)3.2 years3.3 years
% of Borrowings Hedged at Fixed Rates (%)75.9%77.6%

CLAR’s debt profile remains largely unchanged – the only noticeable change was its aggregate leverage, which went up by 2.4pp to 39.8%. However, it is still a good distance away from the regulatory limit of 50.0%.

Debt maturity ahead is well-spread out – with 11% of borrowings due for refinancing in the final quarter of FY2025, an average of 13.6% of borrowings due for refinancing each year over the next 5 years (between FY2026 and FY2030), with the remaining 21% of borrowings due for refinancing only in FY2031 or later.

Closing Thoughts

Dips were reported in CLAR’s occupancy rate (from 91.8% in 2Q FY2025 to 91.3% in 3Q FY2025) – with all the geographical locations except Australia seeing some small declines in their occupancy rates; but having said that, the occupancy rates of the properties in the various geographical locations is maintained at high level of at least 91% (except for the United States, where its occupancy rate was 85.3% – its something I will continue to monitor in the coming quarters).

Additionally, the REIT continued to maintain a positive rental reversion at a portfolio level (at +7.6%), and this will contribute to the stable growth of its financial performance in the coming quarters.

Finally, as far as the CLAR’s debt profile goes, while its aggregate leverage climbed to 39.8%, but there still remain an ample debt headroom to the regulatory limit of 50.0%. Also, debt maturity over the years is very well-spread out.

This brings me to the end of my review of CLAR’s latest business update for 3Q and 9M FY2025. Please note that all the opinions expressed in this post are purely for educational purposes only, and are not meant as any buy or sell calls for the REIT’s units. You are strongly encouraged to 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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