CapitaLand Ascendas REIT - RHB Invest 2023-05-04: A Defensive Shelter

• CapitaLand Ascendas REIT (SGX:A17U)’s 1Q23 updates show continued operational momentum with healthy double-digit rent reversions. Its diverse portfolio (major focus on Singapore assets) should benefit from the positive outlook for the resilient industrial segment.
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• CapitaLand Ascendas REIT remains a defensive shelter amid the current market volatility.

Strong rent reversion of 11% with all markets and segments registering positive rent reversions.

• CapitaLand Ascendas REIT’s Singapore logistics assets saw the highest rent reversion of 23.6%, highlighting the continued favourable demand-supply dynamics of the sector. While rent reversions are likely to moderate in the coming quarters on the back of increased supply and the economic slowdown, it is still expected to remain at a healthy mid-single digit for the full year.
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• MQX4, the Sydney business park that is currently under development, is expected to be completed by 2Q. The conversion of Lusk Boulevard in San Diego – from offices to a life sciences building – is expected to be completed by the end of the year. Upon completion, both assets are estimated to add ~S$10m (1%) in NPI, and should have a positive impact on the valuation of CapitaLand Ascendas REIT's portfolio.

Anticipating more divestments in Singapore.

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Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-05-04 SGinvestors.io

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