CapitaLand Ascendas REIT Earnings: In-Line Performance; Driving Growth Through Redevelopment

We retain our fair value estimate of SGD 2.90 per unit for CapitaLand Ascendas REIT after an in-line second-half 2024 performance. The portfolio occupancy rate improved by 0.7 percentage points quarter on quarter to 92.8% as of end-2024 as the trust saw improving occupancies across its Singapore, US, and Australia portfolio. The trust also delivered on its positive rental reversion target, recording an 11.6% rental reversion for 2024. Looking ahead, management has guided for rental reversions to be in the mid-single-digit range for 2025. After rolling our model, we lowered our distribution per unit estimates for 2025-27 by 2.8%-7.8% after adjusting our interest cost assumptions for a higher-for-longer interest-rate environment. The trust continues to appear undervalued and trades at an attractive 2025 distribution yield of 5.8%.