CapitaLand Ascendas REIT invests $1.4 billion in two Singapore assets, Japan data centre

SINGAPORE – CapitaLand Ascendas REIT (CLAR) is continuing its portfolio refresh with $1.4 billion worth of acquisitions across Singapore and Japan, it said on March 24.

In Singapore, it is set to buy all of 25 Loyang Crescent – a cluster of ramp-up logistics and industrial buildings – for $504.2 million. It has also bought a 50 per cent interest in Ascent, a premium business space property for $245 million. A global sovereign wealth fund will acquire the remainder of Ascent.

The real estate investment trust is also entering Japan through the acquisition of a 49 per cent interest in a Tier 3 hyperscale data centre in Greater Osaka for $620.7 million. The remaining interest in the data centre is held by a fund managed by Mitsui & Co Realty Management.

CLAR said it is also launching a preferential offering and private placement to raise $900 million. Nearly $500 million will be used to finance the Japan and Singapore acquisitions, with the rest used to fund previously announced asset buys.

Mr William Tay, chief executive and executive director of CLAR’s manager, said: “These assets strengthen our presence in Singapore... while expanding into developed markets such as Japan with healthy market fundamentals and demand drivers.”

“CLAR’s new expansion into Japan reflects our disciplined approach to scaling and diversifying CLAR’s global data centre portfolio across key established digital hubs with strong demand drivers and connectivity.”

Accretive acquisitions

The three asset purchases are also expected to be cumulatively and individually accretive on a pro forma basis, it added. Assuming all the acquisitions were completed on Jan 1, 2025, the distribution per unit accretion is expected to be around 3.18 cents, or 2.1 per cent.

With the buys, CLAR’s Singapore assets under management (AUM) value will increase to about $13.2 billion and make up about two-thirds of its total portfolio AUM. The occupancy and weighted average lease expiry of CLAR’s portfolio will also increase to 91.5 per cent and 4.3 years, respectively.

The 40.5MW Japan hyperscale data centre has the potential for a 13.3 per cent capacity expansion, added CLAR.

Its purchase is set to be completed in the second quarter, while the Loyang purchase is set to be completed in the third quarter of 2026.

Real estate services company CBRE brokered the Loyang deal.

Ms Loh Lee Fen, head of industrial capital markets, Singapore at CBRE, said: “Singapore continues to cement its position as one of the region’s most reliable investment destinations.”

“The softening of interest rates to their lowest levels since 2022 has further strengthened buying momentum. Well-stabilised assets with good tenant covenant and long leases are popular given the resilience and clarity of income they provide in today’s environment,” she added.

Unit issue and advanced distribution

As part of the broader equity fund-raising, CLAR will have a non-renounceable preferential offering to eligible unit holders to raise about $300 million and a private placement for institutional, accredited and other investors to raise about $600 million.

The new preferential offering units will have an issue price ranging between $2.35 and $2.40 each. Entitlements for this preferential offering will be determined based on existing units held as at 5pm on April 1.

Meanwhile, the private placement units will be issued at a price ranging from $2.406 and $2.45.

To ensure fairness to existing unit holders, the manager is proposing an advanced distribution, expected to be 3.75 cents per existing unit, before the new private placement units are issued. The advanced distribution covers the period from Jan 1 to the day immediately prior to the issuance of the private placement units, which is expected to be on or around April 2.

This proposed payout comprises a taxable income component of 3.116 cents, a capital distribution component of 0.59 cent, and a tax-exempt income component of 0.044 cent.

Unit holders whose accounts are credited with existing units at 5pm on April 1 will be eligible for the payout, which is expected to be distributed on or around April 30. THE BUSINESS TIMES