CapitaLand Ascendas REIT

Good evening. Welcome to Capital Land Ascendas REIT full year 2025 results briefing. I'm Johanna from the investor relations team. Thank you for joining us here today in person at Capital Tower and for those joining us remotely. Please note that this briefing is recorded and will be made available on our website. The session will start shortly with a presentation by Andrea from the Investor Relations Team followed by Q&A with the management. First and foremost, I would like to introduce the panel this evening. We have Mr William Tay, our Chief Executive Officer. On his right, we have Ms Koo Lee Sze, our Chief Financial Officer. And last but not least, we have Mr James Goh, Head of Portfolio Management. Before we start, we would like to lay down some housekeeping rules. During the Q&A, if you have any questions, please raise your hands, and my colleagues at the back will hand you a microphone. Please try to keep to two questions each time, and if there's more, we will come back to you. For those joining online, you may post your questions remotely via the chat box. And with that, I'll hand over the time now to Andrea, who will bring us the highlights of the results. Andrea, please.

Thank you, Johanna. Welcome and thank you everyone for joining this briefing physically as well as online. So I will give a brief overview of the financial and operational performance of Capital Land Ascendas REIT as well as some highlights of investment. First, some key numbers. So Claire continued to deliver growth in distributable income against a backdrop of economic uncertainty. For FY 2025, the distributable income was 678.3 million. This is 1.4% higher than the previous year. The better performance was driven by accretive acquisitions of quality assets in 2025 and supported by the prudent management of operating and interest expenses. So the higher distributable income translated to a distribution per unit of 15.005 cents. The value of investment properties rose to $18.2 billion, which is an increase of 8.6% year-on-year from $16.8 billion a year ago. And on to asset management, as at the end of December 2025, the portfolio occupancy was 90.9%, and we achieved a high rental reversion of 12% for leases renewed during the full year. This is Claire's third consecutive year of double-digit reversions. As at end December, gearing was healthy at 39%, and the average cost of that for 2025 was 20 basis points lower year-on-year at 3.5%. Our Active Portfolio Rejuvenation Strategy seeks to ensure that Claire's portfolio remains relevant, so we were disciplined and focused on executing our multi-pronged strategy for growth in 2025. We completed approximately $1.5 billion of acquisitions, largely in Singapore. This is one of the highest levels of acquisition activity since 2021. So to recap, the acquisitions were six properties in Singapore as well as the US, and their initial NPR yields ranged from about 6% to 7 plus percent. So besides acquiring income-producing properties, we also invested about $350 million to develop new green-certified logistics assets in the UK. So there are two projects in the UK, in Menton Wood and Halster, and the expected use of these properties are about 7%. And we also completed two redevelopments in Singapore. They are One Science Park Drive, a business space and life sciences property, and 5 Toguan Road East, a modern ramp-up logistics property. These two new properties have achieved healthy leasing levels of about 81% and 65% respectively. So the good market reception reflects confidence in our rejuvenation strategy to future-proof our properties and we will look to do more. We accelerated the pace of divestments in 2025, reaching about $506.5 million in total. This divestment amount is a 9% premium to their total market valuation, as well as a 14% premium to their total original purchase price. These divestments are in line with our capital recycling strategy to maintain financial flexibility and liquidity for accretive investment opportunities. We'll go into the financial performance. So comparing the full year of 2025 against 2024, gross revenue increased by 1% to approximately $1.54 billion. The properties acquired in 2025 contributed to the increase. They are DHL Indianapolis Logistics Center, a logistics property in the US, as well as two properties in Singapore, namely 5 Science Park Drive and 9 Hai Seng Drive. So their higher revenue contribution was partly offset by divestment of properties in 2024 and 2025. Partly supported by lower property operating expenses, NPI was up by a better 1.7%. So as mentioned earlier, the DI for 2025 increased by 1.4% year-on-year to $678.3 million. DPO for the full year declined slightly to $15.005 on a slightly larger unit base. Claire had conducted an equity fundraising in the first half of 2025 to fund investments. It was a private placement of about $500 million to fund our acquisitions. When we compare the second half of 2025 against the first half, both gross revenue and MPI increased by about 4%. So contributing to the higher income were the two properties acquired in August, namely the data center nine tithing drive and the business space property five science park drive. The increase was partially offset by some divestments completed in 2025. DI increased by 4.9% to $347.2 million, partly supported by lower interest expenses. So as a result, DPU in the second half increased by 0.7% to 7.528 Singapore cents. Claire distributes income on a semi-annual basis, so we have declared a DPU of 7.528 cents for the second half, and unit holders can expect to receive the distribution on Friday, the 13th of March. This section covers the details of all of Claire's investments, which were summarized earlier. I would just like to highlight a couple of latest developments. So besides redevelopments, we also carry out AEIs, which are asset enhancement initiatives. So these AEIs are projects to upgrade our properties and modernize the facilities, thereby increasing long-term value. So in 2025, we completed about 29 million of AEIs, the largest of which was at Aperia in Singapore for 22.7 million. So at Aperia, besides upgrading the drop-off point, the office and retail entrances, we also reconfigured some of the retail space on Level 1 for better flow, and there are new F&B offerings to provide more offerings and choices for tenants and visitors. So the new retail units are mostly leased, and the expected ROI is approximately 9%. At the end of the year, we have seven projects that will rejuvenate the portfolio and enhance returns. So currently there are three developments, two redevelopments and two AEIs worth about $730 million. These projects are scheduled for completion in the next three years, meaning from 2026 to 2028. And continuing our acquisition momentum into 2026, just last week we completed the acquisition of DHL Canal Winchester. The purchase price is about $95 million and the initial NPI yield is about 7.4%. This property was completed just two years ago and is fully occupied by DHL, an international logistics company. The will is about five years and the lease term includes built-in annual rental escalation of 3.5%. The property is well located along a highway with access to three interstate expressways and is close to a cargo-dedicated international airport. The property is in Columbus, Ohio, one of the main logistics markets in the Midwest in the U.S., so it complements Claire's logistics portfolio in the U.S., which comprises assets in three other Midwest cities, which are namely Kansas City, Chicago, and Indianapolis. We'll move on to the balance sheet. So the gearing remains healthy at 39%. It increased slightly from a year ago, mainly due to higher borrowings to fund investments. Total assets have also increased to more than $19 billion. The adjusted net asset value per unit was stable year-on-year at $0.221. So Claire's financial metrics remain strong and we exceed bank loan covenants by a healthy margin. So just going through some key financial metrics, the ICR remains at 3.6 times and cost of debt has come down slightly to 3.5%. The percentage of our fixed rate debt is also high at about 75%. So our total debt is about 7.6 billion and it comprises various currencies such as Sing Dollar, US Dollar, Aussie Dollar, Great Britain Pound and Euro. So the debt expiries are well spread over the next eight years until 2034. Over these two years, meaning 2026 and 2027 specifically, only about 12% of the total debt is due. On Natural Hedge, we continue to have a high level, about 76% for our overseas investments, which make up about 30 plus percent of the portfolio. So we also conducted the annual revaluation of our portfolio of investment properties. So the total valuation of our 2-2-2 investment properties was $18.2 billion as at the end of the year. This is a year-on-year increase of about 8.6% or about $1.4 billion. This was mainly due to new properties acquired as well as the completion of the redevelopment of 5 Togo and Road East. On the same score basis, the portfolio valuation increased by 2%, or about 300 plus million, to 16.6 billion. This was mainly due to cap rate compression. By segment, all three segments, meaning business space and life sciences, industrial and data centres, as well as logistics, all recorded year-on-year increases. Portfolio Occupancy Portfolio Occupancy Portfolio Occupancy Portfolio Occupancy Portfolio Occupancy Portfolio Occupancy Excluding 5 Togo and Road East, which just completed its redevelopment in the third quarter of 2025, the occupancy rate of the Singapore portfolio would have been higher at 91.7%. For the US, it was a slight increase of 20 basis points from the previous quarter to 85.5%. For Australia, the occupancy rate was 94.4%, slightly lower by 40 basis points. The occupancy of the UK Euro portfolio was 92%. The decline was due to a lease expiry at a logistics property in the UK, which is actually slated for redevelopment. So if you exclude this property, which is slated for redevelopment, the UK Euro portfolio occupancy rate will remain high at 98.7%. So excluding 521 Road East, which just completed redevelopment in third quarter, as well as this UK logistics property, which is slated for redevelopment, a portfolio occupancy will actually be higher at 91.9% instead of 90.9%. We will go on to talk about the rental reversions. So rental reversions for the portfolio on the whole was 12%. Can refer to the last brown row of the table. In 4Q, the reversion was 19.6%, which is higher than 3Q and the earlier two quarters of 2025. The high reversion achieved in 4Q was boosted by Singapore's business space and life sciences segment, which had a reversion of 26.7%. So our strong reversion performance reflects the quality and relevance of our portfolio, and for the coming year 2026, our guidance is in the mid single digit range. The will of the portfolio remains stable at 3.7 years. And in 2026, for the whole portfolio, meaning all four geographies, only about 20% of gross rental income is due for expiry. I will end with the market outlook slide. Global economies are expected to remain resilient, although uncertainties to the outlook remain. In this current economic environment, we are confident of navigating through challenges, given our well-diversified portfolio in developed markets, our large tenant base, good operational management, as well as prudent financial management. So the investments in 2025 have strengthened Claire's earnings resilience and strengthened our portfolio quality. So we will continue to pursue our portfolio rejuvenation strategy. And this is so as to enhance the long-term income sustainability and create additional value for unit holders. I've come to the end of my presentation and thank you for your attention. We will move on to the Q&A segment. Those who are joining us basically, you can raise your hand and I will call out your name. We will have the first question from Rachel from McQuarrie.

Hi, good evening, William and Tim. Thanks for the opportunity to ask the first questions, or first two questions. I think firstly, maybe just on the positive side, your rental reversions have been very strong, as what Andrea has alluded to your Singapore assets. So maybe guidance for this year, can you maintain this kind of reversions? And where, likely, which market may have, which market will be strong and which market will be a little bit weak, yeah. You want me to ask my second question too?