CapitaLand Ascendas REIT - Maybank Research 2024-08-01: Stable Performance

• CapitaLand Ascendas REIT (SGX:A17U) reported 1H DPU of S$0.0752, +1.1% h-o-h/-2.5% y-o-y.

Healthy reversions offset by higher financing cost

• Higher interest expense and an enlarged number of units offset top-line growth. Portfolio occupancy was stable though US business parks saw lower occupancy.
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• Following our recent upgrade, we maintain our estimates, rating and CapitaLand Ascendas REIT target price.

Accelerating reversions

• CapitaLand Ascendas REIT's 1H24 revenue and NPI grew 7.2% and 3.9% y-o-y, respectively. Acquisitions and contributions from newly completed properties led the growth. Coupled with higher finance expense and an enlarged number of units (private placement in May 2023), DPU fell 2.5%.
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• Portfolio occupancy was 93.1% (93.3% in 1Q, 94.4% a year ago). Occupancy was stable across geographies except the US where it fell a couple of %pts due to expiries in single tenanted business parks.
• Rent reversion was +13.4% for 1H, +11.7% for 2Q, led by logistics. That said, management of CapitaLand Ascendas REIT noted that industrial and data centres (DC) in its portfolio are new growth centres while logistics is entering a high but mature growth phase. Management of CapitaLand Ascendas REIT raised rent reversion guidance for the full year to high single-digit.

Financial metrics stable

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-08-01

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