CapitaLand Ascendas REIT (A17U) H1 2024 earnings summary

Executive summary

• Gross revenue for 1H 2024 rose 7.2% year-over-year to S$770.1 million, driven by acquisitions, completed developments, and partially offset by divestments and property decommissions.

• Net property income increased 3.9% year-over-year to S$528.4 million, while net income declined 25.4% to S$296.0 million due to higher finance costs and foreign exchange losses.

• Distributable income grew 1.0% year-over-year to S$330.8 million, but distribution per unit (DPU) declined 2.5% to 7.524 cents due to a larger unit base.

• Portfolio comprised 229 properties across Singapore, Australia, UK/Europe, and the US, with a diversified tenant base of over 1,780.

• Portfolio occupancy remained healthy at 93.1%, with positive rental reversions of 13.4% in 1H 2024.

Financial highlights

• Gross revenue: S$770.1 million (+7.2% YoY); Net property income: S$528.4 million (+3.9% YoY).

• Net income: S$296.0 million (-25.4% YoY); total return for the period: S$353.7 million (-5.0% YoY).

• Earnings per unit: 7.948 cents (-8.4% YoY); DPU: 7.524 cents (-2.5% YoY).

• Investment properties valued at S$16.87 billion as of 30 June 2024; net asset value per unit: S$2.27.

• Aggregate leverage at 37.8%, with S$4.4 billion debt headroom to MAS limit; cost of debt stable at 3.7%.

Outlook and guidance

• Rental reversions expected to remain in the positive high-single digit range for FY2024.

• Macro environment remains stable but slow, with global growth forecast at 3.2% in 2024 and Singapore GDP projected at 1.0–3.0%.

• Portfolio repositioning towards growth sectors (technology, life sciences, logistics) and ongoing redevelopments worth S$543.6 million.

• US, Australia, UK, and Europe portfolios expected to generate stable returns, supported by long WALE and diversified tenant base, though some occupancy fluctuations are anticipated in Australia.

• Ongoing uncertainties in inflation, monetary policy, and geopolitics may impact operating costs and tenant businesses.