The manager of CapitaLand Ascendas REIT A17U (CLAR) has reported that it has maintained its portfolio occupancy of 94.5% for the 3QFY2023 ended September, with no y-o-y change.
However, its portfolio occupancy for this quarter is 0.1% higher q-o-q.
The average portfolio rent reversion of leases renewed in 3QFY2023 was 10.2%, in which it has taken into account renewed leases in multi-tenant buildings that were signed in 3QFY2023.
The manager says it expects the rental reversion for the FY2023 to be in the positive high-single digit range.
For this period, the REIT’s weighted average lease expiry (WALE) by gross revenue stood at 3.9 years, with no y-o-y change, while the weighted average lease term of new leases signed in 3QFY2023 was 4.7 years and contributed 1.9% of total gross revenue.
CLAR’s aggregate leverage stood at 37.2%. About 81% of the borrowings are on fixed rates with an average term of 3.3 years.
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The manager says that a 100 basis points increase in interest rate on variable rate debt is expected to have a pro forma impact of $12.6 million decline in distribution or 0.3 cents decline in distribution per unit (DPU).
The REIT has $272 million of borrowings due to be refinanced in FY2023.
For this period, CLAR maintained a high level of natural hedge of about 75% for its overseas investment to minimise the effects of any adverse exchange rate fluctuations.
The manager says that with EUR fully-hedged, and if AUD, USD and GBP weaken by 15%, the overall impact to net asset value is less than 3%.
The manager adds that high interest rates, inflation, and global economic uncertainties continue to pose challenges, which may have an impact on tenants’ businesses as well as on CLAR’s operating costs.
Units in CLAR closed 1 cent higher or 0.40% up on Oct 27 at $2.51.
