On 31 October 2025, CapitaLand Ascendas Real Estate Investment Trust (“CLAR”) announced their third quarter business update for FY2025. There was a significant increase in aggregate leverage and decrease in occupancy this quarter. These are factors to take note of as they may create downward pressure on DPU in the next financial update.
There was a notable change in the top 10 customers, with SEA Group now the top tenant accounting for 3.6% of CLAR monthly portfolio gross revenue. This was an increase from 1.8% in the previous quarter.
In the business update, CLAR has announced proposed acquisitions of three industrial and logistics properties in Singapore with purchase consideration of SGD565.8 million to be completed in the first quarter of 2026. The amount is notable, and with the current high aggregate leverage, CLAR has taken steps to recycle their capital by announcing the disposals as below.
Subsequent to the announcement, CLAR announced on 7 November 2025 the completion of divestment of Astmoor Road, North West England, UK. The proposed disposal was announced during the business update for SGD52.5 million. This represents a premium of 12.7% to the valuation as of 15 July 2025.
CLAR also announced on 11 November 2025 the proposed divestment of 95 Gilmore Road (the Property), a logistics property in Queensland, Australia. The sale consideration is approximately SGD90.0 million (AUD101.8 million), which represents a premium of 9.5% over the independent market valuation as of 30 September 2025 and a premium of 17.2% to the original purchase price in October 2015.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only. It does not take into account your individual needs, investment objectives and specific financial circumstances.
Website: General Announcement::Business Updates For The Third Quarter Ended 30 September 2025
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | No Update | -2.7% |
| Rating | Unfavorable | Unfavorable |
Based on the announcement on 31 October 2025, DPU was not included in the business update for the third quarter of FY2025.
The metric was Unfavorable in the previous quarter as 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.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 91.3% | 91.8% |
| Rating | Unfavorable | Unfavorable |
Occupancy rate as of 30 September 2025 has decreased to 91.3%. The significant decrease arose from the United States portfolio, which saw a decrease by 2.0% quarter-on-quarter. This metric remains Unfavorable as it is significantly below my expected healthy occupancy rate of 95%.
Gearing Ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 39.8% | 37.4% |
| Rating | Neutral | Favorable |
Gearing ratio as of 30 September 2025 has increased to 39.8%. Noted that total borrowings have increased to approximately SGD7.5 billion, compared to SGD6.7 billion in the previous quarter. This metric has shifted back to Neutral.
Interest Coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 3.6x | 3.7x |
| Rating | Favorable | Favorable |
The adjusted interest coverage as of 30 September 2025 remain relatively unchanged at 3.6 times. This metric remains Favorable as the coverage ratio is above my preferred coverage of 3.0 times.
Debt Maturity Profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.3 years | 3.2 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 30 September 2025 remain relatively unchanged at 3.3 years. This metric remains Favorable as there is still sufficient time to refinance their debts as they fall due. Do note that approximately 23.0% of their debt will mature by the end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.28 | 1.30 |
| Rating | Unfavorable | Unfavorable |
Based on the announcement on 31 October 2025, net asset value (“NAV”) was not included in the business update for the third quarter of FY2025.
The Price to Book (“P/B”) ratio has become cheaper at 1.28. This was computed using the closing share price of SGD2.80 per unit as of 14 November 2025 and net asset value per share of SGD2.19 per unit as of 30 June 2025. The P/B ratio remains Unfavorable as the share price is still a premium from the book value.
As of 14 November 2025, the Market Capitalization is approximately SGD13,043 million.
Website: Yahoo Finance: CapitaLand Ascendas REIT (A17U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 5.41% | SGD 0.152 |
| 2024 | 5.34% | SGD 0.150 |
| 2023 | 5.59% | SGD 0.156 |
| 2022 | 5.54% | SGD 0.155 |
| 2021 | 3.32% | SGD 0.093 |
| 2020 | 5.89% | SGD 0.165 |
The total dividend payout remains unchanged at SGD0.152 per unit for the calendar year 2025. With a closing price of SGD2.80 per unit on 14 November 2025, this translates to a dividend yield of 5.41%. For my benchmark, a general reasonable yield would be around 4.25%. As CLAR is trading above my benchmark, the dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q4 – 4.25%
In the event that the required dividend yield increases to 6.25% as a benchmark, based on the dividend of SGD0.152 per unit there is potential for CLAR to see its share price drop by 13.1% to SGD2.43 per unit.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.80 | – |
| 6.25% | 2.43 | -13.1% |
| 7.25% | 2.10 | -25.1% |
Interest Rate Sensitivity
The Federal Reserve on 29 October 2025 approved its second straight interest rate cut, though Chair Jerome Powell rattled markets when he threw doubt on whether another reduction is coming in December. This lowers the benchmark overnight borrowing rate to a range of 3.75% to 4.00%.
Website: Fed cuts rates again, but Powell raises doubts about easing at next meeting
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 2.3%.
| Change in Interest Rates | Change in Distributable Income (SGD’000) | Change as % of FY2024 Distribution |
|---|---|---|
| 50 bps | $7,700 | 1.1% |
| 100 bps | $15,300 | 2.3% |
| 150 bps | $23,000 | 3.4% |
| 200 bps | $30,700 | 4.6% |
Other Metrics
Tenant Profile
CLAR has a well-diversified tenant profile of 1,790 tenants with the top 10 customers as of 30 September 2025 accounted for about 16.6% of monthly portfolio gross revenue. with the largest customer accounting for 3.6% 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 | No Update | Unfavorable |
| Occupancy | 91.3% | Unfavorable |
| Gearing Ratio | 39.8% | Neutral |
| Interest Coverage | 3.6x | Favorable |
| Debt Maturity Profile | 3.3 years | Favorable |
| Price to Book Ratio | 1.28 | Unfavorable |
| Overall | Neutral |
The overall metrics remain Neutral. The significant change this quarter is the continued decrease in occupancy and increase in gearing ratio. This may translate to a DPU decrease in the next financial update.
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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