CapitaLand Ascendas Reit’s portfolio occupancy dips to 91.3% in Q3; rental reversion slows
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An office building in Australia that is part of CapitaLand Ascendas Reit’s portfolio.
PHOTO: CAPITALAND ASCENDAS REIT
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- CapitaLand Ascendas Reit's Q3 portfolio occupancy declined to 91.3%, with Singapore dropping due to the 5 Toh Guan Road East redevelopment.
- Rental reversion decreased to 7.6% in Q3, but the manager projects "positive low double-digit range" for the full year 2025.
- Aggregate leverage rose to 39.8%; five Singapore properties are proposed for divestment at a $329 million total consideration.
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SINGAPORE - CapitaLand Ascendas Reit’s (Clar) portfolio occupancy declined to 91.3 per cent in the third quarter from 91.8 per cent in Q2, said its manager in a business update on Oct 31.
In Singapore, occupancy fell by 0.8 percentage point quarter on quarter to 90.4 per cent, largely due to the addition of 5 Toh Guan Road East, which completed its redevelopment in September. Excluding this property, occupancy would have remained stable at 91.1 per cent.
Similarly, in the United States, occupancy decreased by two percentage points from the previous quarter to 85.3 per cent, primarily attributed to lower occupancy levels in Raleigh. The logistics portfolio “remained healthy” in the US, with occupancy at 92.3 per cent, said the real estate investment trust’s (Reit) manager.
Occupancy in Australia rose by 1.7 percentage points quarter on quarter to 94.8 per cent, driven by improvements in the logistics portfolio. Meanwhile, occupancy in the UK/Europe edged down 0.1 percentage point to 98.8 per cent.
In terms of rental performance, Clar’s average portfolio rental reversion for renewed leases decreased slightly to 7.6 per cent in Q3, down from 8 per cent in the second quarter.
Nevertheless, its manager remains optimistic, projecting rental reversion for the full year of 2025 “to be in the positive low double-digit range”.
The business space and industrial Reit’s portfolio weighted average lease expiry remained stable at 3.6 years.
In Q3 2025, the weighted average lease term of new leases signed was 3.4 years, contributing 2.3 per cent of total revenue for the quarter. Additionally, 4.5 per cent of gross rental income is set to be renewed in FY2025.
Strategic plans
Clar’s aggregate leverage rose to 39.8 per cent, from 37.4 per cent in Q2.
Its manager noted that the year-to-date weighted average all-in debt cost remained stable at 3.6 per cent. The average debt maturity stood at 3.3 years, compared with 3.2 years in the previous quarter.
These results follow the manager’s announcement in August regarding the proposed divestment of five Singapore properties.
These divestments are being proposed at “healthy premiums” of about 6 per cent over the properties’ total market valuation and 20 per cent over the original purchase price, for a total sale consideration of $329 million.
Looking ahead, Clar’s manager expects the Singapore portfolio to grow to more than $12 billion with the addition of properties such as 2 Pioneer Sector 1 and 9 Kallang Sector.
“With a strong balance sheet and healthy liquidity, the Reit remains nimble and disciplined in pursuing accretive investment opportunities to enhance its portfolio and deliver sustainable returns to unitholders,” the manager said.
Units of Clar closed 0.4 per cent or $0.01 down at $2.82 on Oct 31, before the release of the results. THE BUSINESS TIMES
