On 4 August 2025, CapitaLand Ascendas Real Estate Investment Trust (“CLAR”) announced their half year result for FY2025. There were no significant changes this quarter, though the DPU decrease is something to monitor. CLAR may be able to see some relief from financing costs, as interest rates are forecasted to decrease over the next few quarters and CLAR has taken steps to refinance their existing borrowings at lower rates. There are also notable acquisitions in the pipeline and redevelopments underway, which in turn better position CLAR for income growth.
Subsequent to the result announcement, CLAR announced the acquisition of their first logistics developments in the UK for SGD350 million and divestment of five properties in Singapore for SGD329 million on 11 August 2025 and 18 August 2025 respectively. These transactions are part of the Manager’s proactive capital recycling strategy and to scale up the UK logistics portfolio.
CLAR has also announced the issuance of SGD300 million fixed rate subordinated green perpetual securities and SGD700 million 2.343 per cent green notes due 2032 on 15 August 2025 and 27 August 2025 respectively. These are to be used for refinancing the existing borrowings of CLAR and its subsidiaries (the “Group”) relating to the Eligible Projects undertaken by the Group in accordance with the CLAR Green Finance Framework.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Half Yearly Results
Website: General Announcement::Issuance Of S$300M Fixed Rate Subordinated Green Perpetual Securities
Website: General Announcement::Issuance Of S$700M 2.343 Per Cent Green Notes Due 2032
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | -2.7% | No Update |
| Rating | Unfavorable | Favorable |
DPU for the first half of FY2025 has decreased by 2.7% to SGD0.07477 per unit from SGD0.07681 per unit in the second half of FY2024. Management have disclosed that the DPU decrease mainly arose from the higher applicable number of units and interest expense, partially supported by higher net property income. The metric is Unfavorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 91.8% | 91.5% |
| Rating | Unfavorable | Unfavorable |
Occupancy rate as of 30 June 2025 has increased slightly to 91.8%. This metric remains Unfavorable as it is significantly below my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 37.4% | 38.9% |
| Rating | Favorable | Neutral |
Gearing ratio as of 30 June 2025 has decreased to 37.4%. Noted that total borrowings have decreased to SGD6.7 billion, compared to SGD6.9 billion in the previous quarter. This metric has shifted back to Favorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 3.7x | 3.6x |
| Rating | Favorable | Favorable |
The adjusted interest coverage as of 30 June 2025 remain relatively unchanged at 3.7 times. This metric remains Favorable as the coverage ratio is above my preferred coverage of 3.0 times in the current high-interest rate environment.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.2 years | 3.1 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 30 June 2025 remain relatively unchanged at 3.2 years. This metric remains Favorable as there is still sufficient time to refinance their debts as they fall due. Do note that approximately 25.0% of their debt will mature by the end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.30 | 1.14 |
| Rating | Unfavorable | Neutral |
The Price to Book (“P/B”) ratio has become more expensive at 1.30. This was computed using the closing share price of SGD2.85 as of 15 September 2025 and net asset value per share of SGD2.19 as of 30 June 2025. The P/B ratio shifted towards Unfavorable.
As of 15 September 2025, the Market Capitalization is approximately SGD13,135 million.
Website: Yahoo Finance: CapitaLand Ascendas REIT (A17U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 5.32% | SGD 0.152 |
| 2024 | 5.25% | SGD 0.150 |
| 2023 | 5.49% | SGD 0.156 |
| 2022 | 5.44% | SGD 0.155 |
| 2021 | 3.26% | SGD 0.093 |
| 2020 | 5.79% | SGD 0.165 |
With a total dividend payout of SGD0.152 per unit for the calendar year 2025 and a closing price of SGD2.85 on 15 September 2025, this translates to a dividend yield of 5.32%. For my benchmark, a general reasonable yield would be around 4.75%. As CLAR is trading above my benchmark, the dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q3 – 4.75%
In the event that the required dividend yield increases to 5.75% as a benchmark, based on the dividend of SGD0.152 per unit there is potential for CLAR to see its share price drop by 7.2% to SGD2.64.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.59 | – |
| 5.75% | 2.64 | -7.2% |
| 6.75% | 2.25 | -21.0% |
Interest Rate Sensitivity
The Federal Reserve Chair Jerome Powell on 22 August 2025 gave a tepid indication of possible interest rate cuts ahead as he noted a high level of uncertainty that is making the job difficult for monetary policymakers. While he noted that the labor market remains in good shape and the economy has shown “resilience,” he said downside dangers are rising. At the same time, he said tariffs are causing risks that inflation could rise again — a stagflation scenario that the Federal Reserve needs to avoid.
Website: Powell indicates conditions ‘may warrant’ interest rate cuts as Fed proceeds ‘carefully’
The Federal Reserve on 31 July 2025 have left its key short-term interest rate unchanged for the fifth time this year, at a range of 4.25% to 4.50%. Powell also signaled that it could take months for the Fed to determine whether Trump’s sweeping tariffs will push up inflation temporarily or lead to a more persistent bout of higher prices. His comments suggest that a rate cut in September, which had been expected by some economists and investors, is now less likely.
Website: Fed’s Powell sticks with patient approach to rate cuts, brushing off Trump’s demands
CLAR have provided the interest rate sensitivity analysis as below. Should the interest rate change by another 1.0%, using FY2024 distribution as a base, distribution is expected to change by 2.5%.
| Change in Interest Rates | Change in Distributable Income (SGD’000) | Change as % of FY2024 Distribution |
|---|---|---|
| 50 bps | $8,200 | 1.2% |
| 100 bps | $16,400 | 2.5% |
| 150 bps | $24,700 | 3.7% |
| 200 bps | $32,900 | 4.9% |
Other Metrics
Tenant Profile
CLAR has a well-diversified tenant profile of 1,790 tenants with the top 10 customers as of 30 June 2025 only account for about 14.9% of monthly portfolio gross revenue. Furthermore, no single customer accounts for more than 2.1% of CLAR’s monthly gross revenue. This is Favorable as CLAR will not be too reliant on any single tenant for income.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | -2.7% | Unfavorable |
| Occupancy | 91.8% | Unfavorable |
| Gearing Ratio | 37.4% | Favorable |
| Interest Coverage | 3.7x | Favorable |
| Debt Maturity Profile | 3.2 years | Favorable |
| Price to Book Ratio | 1.30 | Unfavorable |
| Overall | Neutral |
The overall metrics remain Neutral. The DPU decrease was in line with expectations from the previous quarter. Noted that this may change as occupancy and gearing ratio saw improvements during the quarter. Furthermore, there are expectations that interest rates will continue to decrease over the next few quarters, which in turn will also increase distributable income for CLAR.
Background
CapitaLand Ascendas REIT (“CLAR”) is Singapore’s first and largest listed business space and industrial Real Estate Investment Trust (“REIT”). It was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in November 2002.
It has since grown to be a global REIT anchored in Singapore, with a strong focus on tech and logistics properties in developed markets. It owns properties across three key segments, namely, 1) Business Space and Life Sciences, 2) Logistics, and 3) Industrial and Data Centres in the developed markets of Singapore, Australia, the United States and the United Kingdom/Europe.
CapitaLand Ascendas REIT is listed on several indices. These include the FTSE Straits Times Index, the Morgan Stanley Capital International, Inc (MSCI) Index, the European Public Real Estate Association/National Association of Real Estate Investment Trusts (EPRA/NAREIT) Global Real Estate Index and Global Property Research (GPR) Asia 250. CapitaLand Ascendas REIT has an issuer rating of ‘A3’ by Moody’s Investors Services.
CLAR is managed by CapitaLand Ascendas REIT Management Limited, a wholly owned subsidiary of Singapore-listed CapitaLand Investment Limited, a leading global real estate investment manager with a strong Asian foothold.
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