Image credit: CapitaLand Ascendas REIT
CapitaLand Ascendas REIT (CLAR, SGX:A17U) is Singapore's leading and most trusted real estate investment trust (REIT). It is backed by CapitaLand Investment Limited, a subsidiary of Temasek Holdings. CLAR is not only the first industrial REIT in Singapore but also holds the distinction of being a constituent of the prestigious Straits Times Index.
Overview: The Largest Industrial REIT in Singapore
CLAR boasts an impressive portfolio of 228 properties across Singapore, Australia, the United States, and the UK/Europe. Its operations span three key segments: business space and life sciences, logistics, and industrial and data centers. As of September 30, 2022, the total value of CLAR's investment properties stood at a staggering S$16.5 billion.
Source: CLAR 3Q2022 Business Update
Highly Diversified Portfolio
One remarkable aspect of CapitaLand Ascendas REIT is its highly diversified portfolio, which encompasses varying geographies, industry exposures, and property types. While approximately 61% of its investment properties are located in Singapore, CLAR is steadily increasing its overseas assets to enhance its resilience. By expanding into developed markets like the US, UK, Europe, and Australia, CLAR has acquired properties on freehold land, offering greater long-term value compared to leasehold industrial land in Singapore.
Source: CLAR 3Q2022 Business Update
Prudent Capital Management
Rising interest rates have been a concern for many investors, but CapitaLand Ascendas REIT has implemented measures to mitigate the impact on its financing costs. A significant portion of CLAR's loans (78%) are hedged to fixed rates, ensuring stability even during periods of uncertainty. Furthermore, the REIT maintains a well-diversified debt maturity profile, with no more than 15% of its debt expiring in a single financial year.
Source: CLAR 3Q2022 Business Update
Moreover, CLAR maintains a healthy aggregate leverage of 37.3% as of September 30, 2022, well below the Monetary Authority of Singapore's gearing limit of 50%. This prudent approach ensures that the REIT has sufficient debt headroom for future acquisitions. In addition, CLAR has implemented higher service charges for its Singapore leases to offset rising operational expenses.
High Portfolio Occupancy
CapitaLand Ascendas REIT achieves an impressive portfolio occupancy rate of 94.5% as of September 30, 2022, representing a 2.8% increase from the previous year. The occupancy rates for its Singapore properties consistently outperform the industrial average.
Source: CLAR 3Q2022 Business Update
Potential Tailwinds for CapitaLand Ascendas REIT
CLAR has made strategic acquisitions that position it for future growth. For instance, it recently acquired its first cold storage logistic facility in Singapore. The property is fully occupied by reputable tenants, including a supermarket chain, and offers rental growth potential due to the limited supply of quality cold storage facilities in the country. Additionally, CLAR acquired a high-tech campus serving as Philips' APAC headquarters and innovation center, strengthening its customer base in the technology and biomedical sectors.
Furthermore, CLAR has initiated asset enhancement initiatives to revitalize its portfolio, further enhancing its potential for increased earnings and capital values in the long run.
REIT Dividend Yield and Analyst Ratings
With a trailing twelve-month dividend yield of 5.9%, CapitaLand Ascendas REIT offers attractive returns to investors. On SGX StockFacts, the REIT has been given an overall consensus rating of "outperform" by analysts. The price target of $3.195 suggests an 18% upside potential from CLAR's last traded price of $2.63 on November 2, 2022.
Source: SGX StockFacts, as of November 2, 2022
How to Invest in CapitaLand Ascendas REIT (CLAR): SGX A17U
Investing in CapitaLand Ascendas REIT is easy and accessible. You can trade the REIT on the Singapore Exchange (SGX) under the ticker A17U through platforms like Syfe Trade. Syfe Trade offers a seamless and cost-effective investment experience, with pricing at just 0.06% of the traded value (minimum S$1.98) and no platform or withdrawal fees.
Syfe REIT+ is another option for investors. It is a diversified portfolio that holds 20 of Singapore's top REITs, including CLAR as one of its largest holdings. With Syfe, you can invest in CLAR and other REITs effortlessly by downloading the Syfe app and creating an account with Singpass.
**Disclaimer: This article is for informational purposes only and should not be considered financial advice. It does not promote any specific investment or offer recommendations for buying or selling securities. All investments carry risks, and individuals should carefully consider their financial circumstances before making any investment decisions. This advertisement has not been reviewed by the Monetary Authority of Singapore.
