CapitaLand Ascendas REIT buys S$1.4bn assets, enters Japan

CapitaLand Ascendas REIT is acquiring three properties in Singapore and Japan for S$1.4 billion, marking its entry into Japan.

The acquisitions comprise a 100% interest in 25 Loyang Crescent in Singapore for S$504.2 million, a 50% interest in Ascent at 2 Science Park Drive for S$245.0 million, and a 49% interest in a Tier III hyperscale data centre in Greater Osaka for S$620.7 million.

In Singapore, 25 Loyang Crescent is a cluster of ramp-up logistics and industrial buildings. The purchase price includes an upfront land premium of S$46.35 million.

Ascent is a business space property in Singapore Science Park. The purchase consideration includes a deferred payment of S$15.0 million due no later than 15 months after completion.

A global sovereign wealth fund will acquire the remaining 50% stake in Ascent. In Japan, the rest of the Osaka data centre is held by a fund managed by Mitsui & Co. Realty Management, a subsidiary of Mitsui & Co.

The transactions expand the REIT's portfolio beyond its existing markets and add a data centre asset in Japan. They also deepen its exposure to logistics, industrial and business space assets in Singapore, where it already has a significant presence.

On a pro forma basis, the three acquisitions are expected to lift distribution per unit. Had they all completed at the start of 2025, the increase would have been about 0.318 Singapore cents, or 2.1%.

Each acquisition is also expected to be accretive on a standalone basis. That metric is closely watched by REIT investors because it indicates whether a purchase is likely to support income per unit after financing and other costs.

Singapore focus

The two Singapore assets add to sectors where the trust is already active. Logistics and industrial buildings remain a core part of the domestic portfolio, while business space and life sciences properties have become important segments as occupier demand shifts towards newer and more specialised space.

25 Loyang Crescent adds a logistics and industrial complex at a time when Singapore continues to manage a tight land supply for such uses. Assets with modern specifications and established locations remain attractive to owners and investors, particularly when they support long leases or stable tenant demand.

Ascent gives the trust a larger position in the business space linked to Singapore Science Park. That market has attracted investors seeking exposure to technology, biomedical and research-related occupiers.

Japan entry

The Osaka acquisition is the trust's first move into Japan, one of Asia's largest real estate markets. It also reflects a broader trend of regional property investors increasing allocations to digital infrastructure, especially data centres in established urban markets.

The asset is described as a Tier III hyperscale data centre in Greater Osaka. Such facilities are typically built to meet large-scale computing and storage demand, with operators and investors drawn by long-term customer contracts and rising data usage.

For CapitaLand Ascendas REIT, the deal broadens the geographic spread of its data centre portfolio. It also gives the trust a local partner with an existing stake in the property through a fund managed by Mitsui & Co. Realty Management.

Cross-border deals of this kind are often structured with local partners to help manage market entry, operations and regulatory requirements. A minority stake can also limit capital outlay while giving an investor exposure to a new market segment.

William Tay, Chief Executive Officer and Executive Director of CapitaLand Ascendas REIT Management, outlined the rationale for the purchases.

"Following our recent acquisitions of quality industrial and logistics assets, these three new accretive acquisitions reaffirm our commitment to build a high-quality and resilient CLAR portfolio. These assets strengthen our presence in Singapore, where we have strong market leadership in the business space and life sciences, as well as logistics, while expanding into developed markets such as Japan with healthy market fundamentals and demand drivers," said Tay.

"CLAR's new expansion into Japan reflects our disciplined approach to scaling and diversifying CLAR's global data centre portfolio across key established digital hubs with strong demand drivers and connectivity. This strategic diversification allows CLAR to tap new opportunities for growth while maintaining the disciplined approach that has always guided our investment and portfolio management. We remain focused on enhancing long‐term value for Unitholders through prudent capital allocation, active portfolio management and a continued emphasis on quality to reinforce our position as a leading global REIT," Tay added.

The combined consideration across the three deals underlines the scale of the trust's current investment cycle. It also shows that Singapore remains central to its portfolio even as it adds its first asset in Japan, with the domestic acquisitions accounting for roughly half of the total value.