CapitaLand Ascendas Reit posts 11.1% positive rental reversion in Q1 2023
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Janice Lim
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CAPITALAND Ascendas Reit (real estate investment trust) saw its average rental rates go up by 11.1 per cent for leases renewed in the first quarter of 2023, higher than the 8 per cent reversion rate in the previous quarter.
The renewal rates were highest for the Reit’s Australian assets, whose average rents increased by 14.3 per cent in the quarter, according to a bourse filing on Tuesday (May 2). Singapore assets saw a positive rental reversion of 11.2 per cent, while those in the United States came in at 11.3 per cent.
Assets in the United Kingdom and Europe saw no change in average gross rent in the quarter.
The Reit manager expects rental reversion to be in the positive mid-single-digit range for the financial year of 2023 in a quarterly business update filed on the Singapore Exchange.
The Reit achieved 94.4 per cent portfolio occupancy in Q1 2023, a slight dip from 94.6 per cent in the previous quarter.
It also said that its portfolio weighted average lease expiry stood at 3.8 years, with lease expiry being well spread, even extending beyond FY2037.
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In FY2023, 14.2 per cent of gross rental income would be due for renewal.
The manager said the Reit continues to face challenges from high interest rates and inflation, as well as increased economic uncertainties from the recent US financial sector turmoil and liquidity situation faced by certain sectors due to tighter monetary conditions.
This could leave some impact on tenants’ businesses as well as the Reit’s operating costs.
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“The manager will proactively manage these challenges in a prudent manner and is well-positioned to leverage on Clar’s (CapitaLand Ascendas Reit) strong financial position to take advantage of any growth opportunities should they arise to deliver sustainable returns to unitholders,” read the business update.
Units of CapitaLand Ascendas Reit fell 1.1 per cent or S$0.03 to close at S$2.83 on Tuesday.
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