CapitaLand Ascendas Reit looks to redevelop older business park and data centre assets, as H2 DPU falls 2% to S$0.07528 

[SINGAPORE] CapitaLand Ascendas Reit (Clar) on Thursday (Feb 5) posted a 2 per cent drop in its distribution per unit (DPU) to S$0.07528 for the second half of the year ended Dec 31, 2025, from S$0.07681 for the year-ago period.

Distributable income for the half-year rose 2.7 per cent to S$347.2 million, from S$338 million the year before.

At a results brifing on Thursday (Feb 5), William Tay, chief executive officer of Clar’s manager, said Clar is exploring redevelopment opportunities for its data centre at 5 Tampines Central 6. 

“We are looking at trying to get a higher plot ratio. (Those) are the considerations that we have before we decide what’s our next step for the project.” 

Some of the Reit’s legacy business park spaces are also being progressively redeveloped. 

James Goh, head of portfolio management at Clar, said assets in the Reit’s International Business Park (IBP) cluster in Jurong – where occupancy is lower – are being redeveloped to take advantage of its proximity to the new MRT coming up there.

He cited 27 IBP, an 11-storey development, which is about to receive its temporary occupation permit and which will be directly linked to the Jurong Town Hall MRT station.

Goh said that occupancies may fall in the near-term, but that it is a “worthwhile trade-off” because future pay-offs are going to be much higher.

Changi Business Park, where Clar also has a cluster of buildings, was a source of “a lot of concern” a year and a half ago, he said. 

“Last year on average, we were doing about 81 per cent (in occupancy). This year, in December, we were at about 83 per cent, so there’s a slight … improvement.

“It might not seem large, but in a difficult and challenging market, we continue to outperform.”

He said that Clar has been taking initiatives such as converting pockets of space within Changi Business Park for educational use. 

“Our game plan is really to continue to engage the authorities to accept different or adjacent uses (for land), such that we can revitalise the entire vicinity.”

He added: “We really need to find new sources of demand to backfill those spaces and the (authorities) are on board and helping us with that as well.”

At the results briefing, analysts also asked about tenant movements within Clar’s portfolio. 

Sea’s digital financial services arm, Monee, and its staff have relocated from Galaxis to Rochester Commons, Tay said.

The Reit is understood to be “on track” to leasing out the two available floors in Galaxis. 

As at Dec 31, the overall occupancy of Clar’s assets stood at 90.9 per cent. A positive average rental reversion of 12 per cent was achieved for leases that were renewed in multi-tenant buildings in FY 2025.

Tay said the strong rental reversions reflected the “quality and relevance” of the Reit’s portfolio, which it has curated through investment, divestment, development and asset enhancement.

“Importantly, we secured healthy leasing commitments for our redevelopment projects, demonstrating tenants’ confidence in our rejuvenation strategy to future-proof our properties,” he said. 

Two redevelopment projects in Singapore (1 Science Park Drive and 5 Toh Guan Road East) were completed during the year at a total cost of about S$407.6 million. 

The new properties achieved leasing levels of about 81 per cent and 65 per cent of their net lettable areas, respectively, as at Dec 31, and will contribute income in FY 2026. 

For the second half of 2025, Clar’s revenue rose 4.1 per cent year on year to S$783.8 million, from S$753 million. 

Net property income (NPI) for H2 FY2025 grew 4.3 per cent year on year to S$544.1 million, from S$521.5 million. 

For the full year ended Dec 31, 2025, DPU was 1.3 per cent lower at S$0.15005, from S$0.15205 in the previous year. This was attributed to an enlarged unit base following an equity fundraising exercise in June 2025.

Distributable income for FY2025 grew 1.4 per cent to S$678.3 million from S$668.8 million. Revenue grew by 1 per cent to S$1.54 billion from S$1.52 billion. Net property income (NPI) rose 1.7 per cent to S$1.07 billion in FY2025 from S$1.05 billion previously.

Clar completed about S$1.5 billion of acquisitions in 2025, marking one of the highest levels of acquisition activity for the Reit since 2021, the manager said. 

The acquisitions have an expected initial NPI yield of between 6.1 and 7.6 per cent before accounting for transaction costs, the manager said. 

The Reit also stepped up its pace of divestment in 2025, divesting nine properties in Singapore, Australia, the US and the UK.

With a combined sale price of S$506.5 million, these assets were let go at about 14 per cent premium to their original purchase price of S$443.4 million. 

For 2026, the general outlook for global economic growth is steady and resilient, although uncertainties surrounding tariffs and geopolitical tensions could weigh on economic activity, Clar’s manager said. 

“With a strong balance sheet and healthy liquidity, Clar is well-positioned to leverage growth opportunities to deliver sustainable returns and generate additional value for unitholders.” 

Units of Clar ended at S$2.86, S$0.01 or 0.4 per cent higher on Thursday, before the release of the results.