CapitaLand Ascendas REIT lifts income as portfolio grows

CapitaLand Ascendas REIT reported a 1.4% year-on-year increase in distributable income for the financial year ended 31 December 2025, as acquisitions and cost management more than offset the impact of portfolio sales and a larger unit base.

Distributable income rose to S$678.3 million from S$668.8 million a year earlier. Gross revenue increased 1.0% to S$1,538.6 million and net property income rose 1.7% to S$1,067.6 million. Property operating expenses edged down 0.4% to S$471.0 million.

Distribution per unit (DPU) fell to 15.005 Singapore cents from 15.205¢ in FY 2024, due to an enlarged unit base following an equity fundraising in June 2025. For the second half, DPU was 7.528 Singapore cents, down from 7.681¢ a year earlier.

Based on a closing price of S$2.83 per unit on 31 December 2025, the full-year distribution yield was 5.3%. The record date for the second-half distribution is 13 February 2026, and payment is due on 13 March.

Portfolio value

The portfolio's independent valuation rose 8.6% year on year to S$18.2 billion on 31 December 2025. The trust held 222 investment properties in a geographically diversified, multi-asset portfolio, excluding properties under development.

Singapore remained the largest market by value, with S$12.4 billion, or 68% of the portfolio. Australia accounted for S$2.1 billion (12%), the US S$2.0 billion (11%), and the UK and Europe S$1.7 billion (9%).

On a same-store basis, total portfolio value increased 2.0% to S$16.6 billion. By segment, the Business Space and Life Sciences portfolio rose 1.2% to S$7.8 billion. Industrial and Data Centres increased 4.0% to S$4.9 billion, while Logistics grew 1.1% to S$3.9 billion.

Adjusted net asset value per unit was S$2.21 as at 31 December 2025, unchanged from a year earlier.

Leasing trends

Portfolio occupancy was 90.9% at end-December 2025. Average rental reversion for renewed leases in multi-tenant buildings was 12.0% in FY 2025, based on the average gross rent over the renewed lease period versus the preceding average gross rent from the lease start date.

The largest sources of new demand by gross rental income during the year came from the Logistics and Supply Chain Management, Electronics, and IT and Data Centres sectors.

As of the end of December, the portfolio had 1,731 tenants and a weighted average lease expiry of 3.7 years. About 19.6% of gross rental income is due for renewal in FY 2026.

Acquisitions and recycling

Acquisitions completed in Singapore and the US in 2025 were the main driver of the annual increase in distributable income, supported by tighter control of operating and interest expenses. Divestments completed in 2024 and 2025 partly offset these gains.

In FY 2025, the manager completed about S$1.5 billion of acquisitions at initial net property income yields of 6.1% to 7.6% before transaction costs. These assets are occupied by established tenants.

Two redevelopment projects in Singapore were completed during the year. The assets at 1 Science Park Drive and 5 Toh Guan Road East had a total cost of about S$407.6 million. As of 31 December 2025, they were leased at about 81% and 65% of net lettable area, respectively, and are expected to contribute income in FY 2026. Stabilised yields on cost are projected at about 6% and 8%.

Seven projects remain in the pipeline: three developments, two redevelopments and two asset enhancement initiatives, with an aggregate investment of S$730.3 million. Completion is scheduled between the first quarter of 2026 and the second half of 2028.

Nine properties in Singapore, Australia, the US and the UK were divested in FY 2025 for a total sale price of S$506.5 million, about 9% above their aggregate market valuation of S$465.4 million and 14% above their original purchase price of S$443.4 million.

Balance sheet

Aggregate leverage was 39.0% as at 31 December 2025. The weighted average all-in borrowing cost fell to 3.5% per annum in FY 2025 from 3.7% in FY 2024. Fixed-rate debt accounted for 75.4% of borrowings. The debt maturity profile was 3.1 years, with 12% of total borrowings due for refinancing in FY 2026.

Overseas investments made up about 32% of portfolio value, or S$5.8 billion, with a natural hedge of about 76% for these assets. Total green financing increased to about S$3.3 billion, or around 44% of total borrowings, including S$300 million of Green Perpetual Securities. The trust maintained its A3 investment-grade credit rating from Moody's.

ESG metrics

Green-certified properties increased by 72 in FY 2025 to 156, representing 75% of the portfolio by gross floor area. Solar panels were added to six properties, bringing the total to 30, with a projected annual generation of 28 gigawatt-hours as of 31 December 2025. Green lease coverage by net leasable area rose to 60% from 54% a year earlier.

In the 2025 GRESB Real Estate Assessment, the trust maintained a four-star rating for the third consecutive year and an "A" rating for Public Disclosure for the sixth consecutive year. It was also included in the FTSE4Good Developed and FTSE4Good Developed Minimum Variance indices. In the Singapore Governance and Transparency Index for REITs and business trusts, it ranked second in 2025, up one place.

"We remained disciplined and focused on executing our multi-pronged strategy for growth, and consolidating CLAR's position as a global REIT anchored in Singapore. The portfolio has grown to S$18.2 billion, a 33% increase from S$13.7 billion five years ago. In 2025, the team acquired S$1.5 billion of high-quality assets, largely in Singapore, which remains the cornerstone of our portfolio. These investments strengthened CLAR's earnings resilience, enhanced our portfolio quality, and positioned CLAR for sustainable long-term growth. Our ability to transact at scale reflects the depth of our local market knowledge, strong support from our Sponsor, the CapitaLand Group, and disciplined capital management. Looking ahead, we will remain selective and proactive in evaluating growth opportunities in developed markets with robust fundamentals, compelling risk-adjusted returns, and assets that align with our portfolio objectives, while maintaining a strong balance sheet," said Dr Beh Swan Gin, Chairman of CapitaLand Ascendas REIT Management.

CapitaLand Ascendas REIT also highlighted resilient operational performance and continued portfolio strength despite a challenging macroeconomic environment, pointing to disciplined asset management and sustained tenant demand across its portfolio.

"CLAR has continued to deliver growth in distributable income against a backdrop of economic uncertainty in 2025. We achieved strong positive rental reversions of 12.0%, reflecting the quality and relevance of our portfolio, which we have proactively 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. We will continue to pursue our portfolio rejuvenation strategy, enhance long-term income sustainability and create additional value for unitholders," said William Tay, Chief Executive Officer and Executive Director of CapitaLand Ascendas REIT Management.