Should You Invest In CapitaLand Ascendas REIT [Fundamental Analysis]

In this article, we'll be conducting a fundamental analysis of CapitaLand Ascendas REIT and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having a high degree of capital preservation ability.

Information Is Accurate Up To Nov 2023

Business Description

CapitaLand Ascendas REIT (CLAR), formerly known as Ascendas Real Estate Investment Trust (prior to 2020) was listed in 2002 and owns 230 industrial properties across Singapore, the United States, the United Kingdom & Australia.

What I Like About CapitaLand Ascendas:

Very stable and growing distribution
Underlying land leases are relatively higher as compared to other local industrial REIT
Well-diversified tenants and low-concentration risk
Decently resilient occupancy rate and WALE

What I Do Not Like About CapitaLand Ascendas:

Updates From Recent Performance (Q3 2023)

General Comments:

High level of FX natural hedge: 75%
Decent positive portfolio rental reversion: +10.2%
Acquired data centre in UK valued S$209.4m (85-year remaining lease)

Positive Headwinds:

Negative Headwinds:

Cost of borrowing is expected to increase further from 2023 to 2025 as around 34% of the debt is due to renewal at a time when the interest rate is likely to peak and stay high before coming back down.

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- Work In Progress -

Daniel is a Licensed Independent Financial Consultant with MAS and a Certified Financial Planner (CFP®).

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