CapitaLand Ascendas REIT - RHB Research 2025-06-02: Strengthening Portfolio Quality; BUY

• CapitaLand Ascendas REIT’s latest proposed acquisitions are positive, increasing its exposure to a high-quality and in-demand data centre (DC) segment in Singapore. The acquisitions also testify to the strength of its sponsor ecosystem, providing a quality inorganic growth pipeline.
• - Read this at SGinvestors.io -
• Key catalysts: Likely divestment or redevelopment of Telepark and UK DCs.
• CapitaLand Ascendas REIT remains one of our top industrial S-REIT picks.

Adding high-quality Singapore assets.

• CapitaLand Ascendas REIT proposed the acquisition of 9 Tai Seng Drive (9TS), a Tier-3 co-location DC (completed in 2019, balance 30- year lease) and 5 Science Park Drive (5SP), a premium business park space (2019 completion, balance 56-year lease).
  • - Read this at SGinvestors.io -
  • 5SP will be acquired for S$245m (includes a S$30m deferred consideration, ~7% discount to valuation), and NPI yield of 5.7%.
• Both the assets are fully occupied, with a weighted average lease expiries (WALE) of 4.4 years and 1.5 years. While 5SP has a shorter WALE, the asset is fully occupied by its key tenant, Shopee, and CapitaLand Ascendas REIT is confident of renewing the lease at higher rental rates, as its current rental is ~15% below the market rate. In light of this, CapitaLand Ascendas REIT has negotiated for S$30m to be paid as a deferred consideration, in Nov 2026.
• Overall, the acquisitions will raise its Singapore exposure to 67% (from 65%). The acquisitions are subject to unitholders approval, and likely to be completed by 3Q25.

Good upside potential for DC asset with in-place rental at ~30% below the market rate.

• Read more at SGinvestors.io.

Above is an excerpt from a report by RHB Securities Research.
Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.

Read also RHB's most recent report:
2025-08-05 CapitaLand Ascendas REIT - Enhancing Portfolio Quality; BUY.

Price targets by 4 other brokers at CapitaLand Ascendas REIT Target Prices.

Listing of research reports at CapitaLand Ascendas REIT Analyst Reports.

Relevant links:
CapitaLand Ascendas REIT Share Price History,
CapitaLand Ascendas REIT Announcements,
CapitaLand Ascendas REIT Dividend Payout Dates & Corporate Actions,
CapitaLand Ascendas REIT News