CapitaLand Ascendas Reit to buy Seagate’s The Shugart for $218.2m

SINGAPORE – CapitaLand Ascendas Reit is planning to acquire a high-specification research and development facility and business park property in the one-north district for $218.2 million.

The acquisition of The Shugart from Seagate Singapore is expected to be distribution per unit (DPU) accretive to unit holders, said its manager on Tuesday.

Assuming the acquisition was completed on Jan 1, 2022, DPU would increase by 0.7 per cent or 11 Singapore cents.

The Reit manager expects rental reversion to be in the positive mid-single-digit range for the financial year of 2023, it said in a quarterly business update filed on the Singapore Exchange.

The Reit achieved 94.4 per cent portfolio occupancy in the first quarter of 2023, a slight dip from 94.6 per cent in the previous quarter.

It also said its portfolio weighted average lease expiry stood at 3.8 years, with lease expiry being well spread, even extending beyond financial year 2037.

In financial year 2023, 14.2 per cent of gross rental income would be due for renewal.

The manager said the Reit continues to face challenges from high interest rates and inflation, as well as increased economic uncertainties from the recent United States financial sector turmoil and liquidity situation faced by certain sectors due to tighter monetary conditions.

This could leave some impact on tenants’ businesses and the Reit’s operating costs.

“The manager will proactively manage these challenges in a prudent manner and is well-positioned to leverage on Clar’s (CapitaLand Ascendas Reit) strong financial position to take advantage of any growth opportunities should they arise to deliver sustainable returns to unit holders,” it said.

Units of CapitaLand Ascendas Reit last traded at $2.88 before a trading halt on Tuesday.

THE BUSINESS TIMES