CapitaLand Ascendas REIT - Maybank Research 2023-10-30: Safe Harbour; Upgrade To BUY

• While our concerns about business park supply and operating performance of overseas assets remain, we upgrade CapitaLand Ascendas REIT (SGX:A17U) to BUY from HOLD for its defensive characteristics, exposure to hi-value, knowledge industries and reasonable valuation vs peers and history.

Steady operations

• - Read this at SGinvestors.io -
• The logistics segment continues to enable positive double-digit reversions for the portfolio. Portfolio occupancy inched up marginally, led by Singapore.

Continued positive reversions, defensive attributes

• CapitaLand Ascendas REIT's portfolio occupancy rose to 94.5% in 3Q23 from 94.4% in 2Q23. This was led by 4bps rise in occupancy in Singapore to 92.7%, which offset occupancy declines in Australia and lower occupancy of the acquired UK data centre.
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• Biomedical and agri/aquaculture was the top source of new demand in Singapore in 3Q23. For its overseas portfolio, it was engineering followed by logistics and supply chain management.
• Portfolio rent reversion for 3Q23 was 10.2% (+14% in 1H), led by logistics in Singapore. Guidance remains for positive high single digit reversions for FY23E, unchanged from the prior quarter.

Gearing inches up, limited capital recycling

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-10-30 SGinvestors.io

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