CapitaLand Ascendas REIT’s Strategic Acquisition and Growth Potential Justify Buy Rating

Analyst Lock Mun Yee of CGS-CIMB reiterated a Buy rating on CapitaLand Ascendas REIT (ACDSF – Research Report), with a price target of S$3.10.

Lock Mun Yee’s rating is based on CapitaLand Ascendas REIT’s strategic acquisition of two properties, which are expected to enhance its portfolio and financial performance. The acquisition includes a data center and a business space, both fully occupied, which will increase the REIT’s exposure in Singapore and boost its assets under management. The properties are anticipated to provide rental uplifts upon lease renewals, as current rents are below market rates, offering potential for increased income.
Additionally, the REIT plans to partially fund the acquisition through a private placement, which is expected to have a positive impact on its distribution per unit. The management’s focus on asset enhancement and potential future acquisitions further supports the Buy rating, as these strategies are likely to contribute to long-term growth. The REIT’s diversified portfolio and strong balance sheet also provide resilience against market fluctuations, making it an attractive investment option.

Mun Yee covers the Real Estate sector, focusing on stocks such as Ascott Residence, Keppel REIT, and CapitaLand Ascendas REIT. According to TipRanks, Mun Yee has an average return of 0.4% and a 47.27% success rate on recommended stocks.