CAPITALAND Ascendas Reit : A17U 0% (Clar) saw its average rental rates go up by 16.9 per cent for leases renewed in the first quarter of 2024, up from the 15.2 per cent reversion rate in the previous quarter.
The Reit’s assets in the United States saw a positive rental reversion of 16 per cent for the quarter, while its Singapore assets came in at 16 per cent, the manager said in a quarterly business update on Monday (Apr 22). There were no renewals signed for the Reit’s assets in Australia, the United Kingdom and Europe.
The Reit manager expects rental reversion for FY2024 to be in the “positive mid-single digit range”.
Clar achieved a portfolio occupancy of 93.3 per cent in Q1 2024, a slight dip from 94.2 per cent in the previous quarter.
Its portfolio weighted average lease expiry stood at 3.9 years, with lease expiry well-spread, extending beyond FY2027. In FY2024, 9.3 per cent of gross rental income is set for renewal.
Q1 2024 also saw the Reit complete the divestment of three logistics facilities – 77 Logistics Place, 62 Sandstone Place and 92 Sandstone Place – in Queensland, Australia for A$73 million (S$64.2 million).
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There are five projects in Singapore worth S$551 million that are currently undergoing redevelopment and refurbishment to improve returns of the existing portfolio, the manager said.
These include redevelopments of Science Park Drive, IBP and Toh Guan Road East, as well as asset enhancement initiatives involving Pacific Tech Centre and 80 Bendemeer Road. All are expected to be progressively completed from Q3 2024.
Looking ahead, the manager pointed out that tenants’ businesses and Clar’s operating costs may be impacted by the uncertain outlook for inflation, geopolitical tensions and the risk of faltering growth in China.
It intends to leverage its financial management and operational strength “to proactively manage these challenges in a prudent manner”, adding that the Reit’s portfolio of well-located industrial properties with a stable, diverse tenant base will remain resilient.
In a separate bourse filing on Monday, the manager also gave an update on the use of S$500 million in gross proceeds of Clar’s private placement, which closed in May 2023.
It said that it has utilised S$5.3 million – or about 1.1 per cent – of the gross proceeds to partially finance the proposed redevelopment of a logistics property in Singapore.
The manager previously shared that the gross proceeds will be used to partially fund proposed acquisitions in Singapore and Europe, repay debt, as well as pay the estimated fees and expenses incurred by Clar in connection with the private placement.
Units of Clar closed at S$2.55 on Monday, down S$0.01 or 0.4 per cent, before the business update.
