CapitaLand Ascendas Reit scores higher rental reversion in Q3; occupancy also up

CapitaLand Ascendas Real Estate Investment Trust (Clar) reported higher rental reversion in Q3 2026, reaching 9.9% compared to 5.2% in Q2 and 7.6% the previous year. Portfolio occupancy improved to 90.1% as of September 30, up from 89.1% in the preceding quarter, though it remained below the 91.3% recorded a year earlier. The REIT manages assets worth S$20.7 billion, with Singapore accounting for 66% of that, followed by Australia and the US at about 11% each.

Clar is focusing its portfolio on segments catering to changing market and tenant requirements, such as digitalisation and e-commerce, with business space and life sciences making up S$8.8 billion of the portfolio's AUM. The rest is split between logistics (S$5.5 billion), industrial and data centres (S$6.4 billion). The manager expects full-year rental reversion to remain positive in the "high single-digit range."

The weighted average lease expiry (WALE) is 4.1 years, with 6.6% of gross rental income due for renewal in the remainder of the year. In Singapore, occupancy rose to 90.9% from 90.1% in Q2, mainly due to newly acquired properties being fully occupied and higher occupancy in the logistics portfolio. Occupancy in the US portfolio rose to 82.3% from 80.9% in the previous quarter, driven by logistics properties reaching 100% occupancy in Chicago and Kansas City.

In Australia, occupancy remained unchanged at 91.1%, down slightly from 94.8% the previous year. Occupancy in the UK and Europe increased to 96.3% from 93.1% in Q2, while Japan remained fully occupied. Clar completed two Singapore acquisitions during Q3 for a combined S$638.1 million, including properties at 5 Tuas Avenue 5 and 25 Loyang Crescent, which are fully occupied and have leases with annual rental escalations.

The manager anticipates initial net property income yields of 6.6% and 6.9% for the two properties, respectively. The REIT also plans to divest three Singapore properties for S$281.7 million, which is about 25% above their combined independent market valuation. The sales are expected to be completed in Q4 2026, reducing the REIT's aggregate leverage to about 41% from 41.8% as of September 30. Clar's Singapore portfolio occupancy would rise to 91.5% from 90.9% on a pro forma basis.