Company Coverage
CapitaLand Ascendas REIT (CLAR SP) - 3Q26: Uptick In Occupancy From Singapore And The US
BUY (Maintained)
Current price:
Target price:
Upside:
S$2.21
S$3.25
+47.1%
Analyst
Highlights
- Singapore occupancy rose 0.8ppt qoq to 90.9%, supported by acquisitions of 5 Tuas Avenue 5 and 25 Loyang Crescent, which are fully occupied. Occupancy for the US increased 1.4ppt qoq to 82.3%, driven by leasing at 13144 South Pulaski Road in Chicago and North Topping in Kansas City.
- Completed redevelopment projects are leasing up steadily. Occupancy at 5 Toh Guan Road East reached 64.8% as of Sep 26 and management expects to lease up the remaining logistics space by end-26. Occupancy at 27 IBP stood at 19.0% and is expected to reach 40-50% by end-26.
- Maintain BUY. Target price: S$3.25.
Analysis
- CapitaLand Ascendas REIT (CLAR) provided a 3Q26 business update:
- Higher occupancies in Singapore and the US. Portfolio occupancy recovered 1.0ppt qoq to 90.1% as of Sep 26. Singapore occupancy rose 0.8ppt qoq to 90.9%, supported by fully occupied acquisitions and higher logistics occupancy. US occupancy increased 1.4ppt qoq to 82.3%, driven by leasing at 13144 South Pulaski Road in Chicago and North Topping in Kansas City. Japan remained fully occupied.
- Stronger rental reversions led by Australia. Renewals at multi-tenanted buildings achieved positive rental reversion of 9.9% in 3Q26 (2Q26: 5.2%), bringing 9M26 reversion to 9.0%. Australia recorded 32.5%, including 39.1% for logistics and 13.8% for business space. Singapore and the US achieved 4.3% and 6.4%, respectively. Management expects positive high single-digit rental reversion for 2026. Lifestyle & consumer products and government & NGO accounted for 24.6% and 23.5% of new demand by gross rental income respectively in Singapore. Logistics & supply chain management led overseas demand at 39.9%. Portfolio WALE was 4.1 years.
- Lower debt costs but higher leverage following acquisitions. Weighted average all-in debt cost eased 0.2ppt yoy to 3.4% for 9M26. Aggregate leverage increased 2.1ppt qoq to 41.8%, mainly from acquisition funding. Interest coverage remains healthy at 3.4x. Fixed-rate debt represented 70.1% of borrowings, with an average fixed-debt tenure of 2.9 years. CLAR retained its Moody's A3 credit rating. Applying estimated net divestment proceeds of S$255m to debt repayment would lower leverage to 41%.
Highlights
- Singapore occupancy rose 0.8ppt qoq to 90.9%, supported by acquisitions of 5 Tuas Avenue 5 and 25 Loyang Crescent, which are fully occupied. Occupancy for the US increased 1.4ppt qoq to 82.3%, driven by leasing at 13144 South Pulaski Road in Chicago and North Topping in Kansas City.
- Completed redevelopment projects are leasing up steadily. Occupancy at 5 Toh Guan Road East reached 64.8% as of Sep 26 and management expects to lease up the remaining logistics space by end-26. Occupancy at 27 IBP stood at 19.0% and is expected to reach 40-50% by end-26.
- Maintain BUY. Target price: S$3.25.
Analysis
- CapitaLand Ascendas REIT (CLAR) provided a 3Q26 business update:
- Higher occupancies in Singapore and the US. Portfolio occupancy recovered 1.0ppt qoq to 90.1% as of Sep 26. Singapore occupancy rose 0.8ppt qoq to 90.9%, supported by fully occupied acquisitions and higher logistics occupancy. US occupancy increased 1.4ppt qoq to 82.3%, driven by leasing at 13144 South Pulaski Road in Chicago and North Topping in Kansas City. Japan remained fully occupied.
- Stronger rental reversions led by Australia. Renewals at multi-tenanted buildings achieved positive rental reversion of 9.9% in 3Q26 (2Q26: 5.2%), bringing 9M26 reversion to 9.0%. Australia recorded 32.5%, including 39.1% for logistics and 13.8% for business space. Singapore and the US achieved 4.3% and 6.4%, respectively. Management expects positive high single-digit rental reversion for 2026. Lifestyle & consumer products and government & NGO accounted for 24.6% and 23.5% of new demand by gross rental income respectively in Singapore. Logistics & supply chain management led overseas demand at 39.9%. Portfolio WALE was 4.1 years.
- Lower debt costs but higher leverage following acquisitions. Weighted average all-in debt cost eased 0.2ppt yoy to 3.4% for 9M26. Aggregate leverage increased 2.1ppt qoq to 41.8%, mainly from acquisition funding. Interest coverage remains healthy at 3.4x. Fixed-rate debt represented 70.1% of borrowings, with an average fixed-debt tenure of 2.9 years. CLAR retained its Moody's A3 credit rating. Applying estimated net divestment proceeds of S$255m to debt repayment would lower leverage to 41%.
BUY (Maintained)
Current price:
Target price:
Upside:
S$2.21
S$3.25
+47.1%
Analyst
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