CapitaLand Ascendas REIT deepens presence in Singapore with accretive acquisitions of two prime properties for approximately S$700 million1

Singapore, May 28, 2025 -- CapitaLand Ascendas REIT Management Limited, as the manager (the “REIT Manager”) of CapitaLand Ascendas REIT (“CLAR”), is pleased to announce the proposed acquisitions of 9 Tai Seng Drive, a Tier III colocation data centre in Singapore, and 5 Science Park Drive, a premium business space property in Singapore (collectively, the “Proposed Acquisitions”). The total purchase consideration for these acquisitions is approximately S$700.2 million2.

CapitaLand Ascendas REIT is acquiring 9 Tai Seng Drive, a Tier III colocation data centre, and 5 Science Park Drive, a premium business space property (pictured above), in Singapore for approximately S$700 million.

Mr William Tay, Executive Director and CEO of the Manager

The acquisitions of 9 Tai Seng Drive and 5 Science Park Drive further anchor CLAR in Singapore, which stands as the cornerstone of CLAR’s multi-asset portfolio in matured, developed markets. These strategic additions will increase the share of Singapore in CLAR’s portfolio to approximately 67% of total assets under management. The two properties are 100% leased to reputable and well-established end users and tenants in the digital, e-commerce and financial services industries reflecting our commitment to steer CLAR’s portfolio towards the technology sector. This aligns with CLAR’s strategy to leverage on global growth trends in technological advancement and digital transformation, while diversifying and strengthening its customer base. Both properties are expected to contribute positively to long-term returns with the potential for organic growth through rental uplifts and asset enhancement opportunities.

- Mr William Tay, Executive Director and Chief Executive Officer of the Manager - 

Key Merits of the Proposed Acquisitions

1. Expands CLAR’s portfolio in Singapore with assets in technology sector

The Proposed Acquisitions will deepen CLAR’s presence in Singapore, particularly in the technology sector. The two properties will increase the value of CLAR’s Singapore portfolio by 6.6% to approximately S$11.7 billion and the Singapore portfolio will account for 67% of CLAR’s total assets under management (“AUM”) of S$17.6 billion3.

The proposed acquisition of 9 Tai Seng Drive will significantly expand CLAR’s data centre AUM by 32.8% to approximately S$1.9 billion, comprising 54% in Singapore (S$1.0 billion) and 46% in the UK/Europe (S$0.9 billion)4.

Two of CLAR’s data centre properties, namely Kim Chuan Telecommunications Complex and 38A Kim Chuan Road, are a five-minute drive away from 9 Tai Seng Drive. All three properties are located in Tai Seng Industrial Estate, a strategic location for cloud service providers, enterprises and other data centre players due to its power availability and dense concentration of networks and direct connections to leading network service providers including Global Tier-1 internet service providers and the Singapore Internet Exchange.

The proposed acquisition of 5 Science Park Drive will reinforce CLAR’s market leadership in the Singapore Business Space and Life Sciences segment. The total AUM of the segment in Singapore will increase by 4.8% to approximately S$5.7 billion5.

5 Science Park Drive is part of the “Geneo” life sciences and innovation cluster in Singapore Science Park 1 (“SSP 1”) which includes the redeveloped 1 Science Park Drive, a premium business space property offering business space and wet-lab ready workspace, as well as retail, food and beverage amenities. 1 Science Park Drive was completed in March 2025 and had secured a high committed occupancy. CLAR owns a 34% stake in the newly completed property which comprises three buildings, 1, 1A and 1B Science Park Drive. The proposed acquisition of 5 Science Park Drive further solidifies CLAR’s footprint and competitive positioning in the “Geneo” life sciences and innovation cluster in Singapore Science Park, a key technology and research & development hub in Singapore which is home to over 350 multinational corporations, global leading digital and technology companies, as well as laboratories6.

9 Tai Seng Drive

2. Well-located, modern properties enhance the quality of CLAR’s portfolio

The quality of CLAR’s portfolio will be enhanced with the Proposed Acquisitions which are well-located in key strategic districts of Singapore and are modern properties recently completed about six years ago in 2019. The remaining land lease tenure of both properties are attractively long in Singapore’s industrial market.

9 Tai Seng Drive has excellent accessibility to the central business district, the airport and other parts of Singapore with two expressways (Pan-Island Expressway and Kallang-Paya Lebar Expressway) and the Tai Seng MRT station located in close proximity. It is a modern data centre building with good specifications and has a long remaining land lease tenure of approximately 30 years upon the renewal of the JTC lease7. It has received the BCA-IMDA Green Mark Platinum certification.

Strategically located at the gateway of SSP 1, 5 Science Park Drive is connected to the Kent Ridge MRT station and only a five-minute drive to the Ayer Rajah Expressway and West Coast Highway, which provide easy access and connectivity to the rest of Singapore. The property features modern business space specifications and has a long remaining land lease tenure of approximately 56 years. It is a BCA Green Mark Platinum certified building.

3. Fully committed/occupied by well-established end users/tenant providing stable income streams

The Proposed Acquisitions will provide stable income streams which contribute to the resilience of CLAR’s portfolio. In addition, it is in line with CLAR’s strategy to tap on the global trends of technological advancement and digital transformation, as well as diversify and strengthen its customer base.

9 Tai Seng Drive is fully committed8 by well-established end users in the digital, e-commerce and financial services industries, with a weighted average lease expiry (“WALE”) (weighted by revenue) of 4.4 years as at 15 May 20259.

5 Science Park Drive is fully occupied by Shopee. Launched in 2015, it is one of the largest pan-regional e-commerce platforms in Southeast Asia and Taiwan with significant presence in Latin America. The property serves as the e-commerce giant’s regional headquarters. Shopee is a subsidiary of Sea Limited, a global consumer internet company founded in Singapore in 2009 and listed on The New York Stock Exchange.

4. Attractive net property income (“NPI”) yields

The first year NPI yield10 of the proposed acquisition of 9 Tai Seng Drive, based on the colocation agreements currently in force and committed, is attractive at approximately 7.2% pre-transaction costs and 7.1% post-transaction costs.

The first year NPI yield11 of the proposed acquisition of 5 Science Park Drive is approximately 6.1% pre-transaction costs and 5.7% post-transaction costs, excluding the deferred consideration of S$30.0 million for 5 Science Park Drive (“5SPD Deferred Consideration”) which is payable on 13 November 2026, when the existing lease term ends, and there is potential rental uplift as a result of rental reversion to market rent.

5. Distribution per Unit (“DPU”) accretive to Unitholders12

Assuming the Proposed Acquisitions were completed on 1 January 2024, the pro forma impact on the DPU for the financial year ended 31 December 2024 is expected to be an improvement of approximately 0.206 Singapore cents or a DPU accretion of 1.36%.

The proposed acquisitions of 9 Tai Seng Drive and 5 Science Park Drive are DPU accretive on a standalone basis.

For 9 Tai Seng Drive, the Manager expects an improvement of approximately 0.188 Singapore cents or a DPU accretion of 1.24% on a pro forma basis13.

For 5 Science Park Drive, the improvement would be 0.021 Singapore cents or a DPU accretion of 0.14% on a pro forma basis14. Taking into account the incremental financial effects of the estimated rental reversion and 5SPD Deferred Consideration, the DPU accretion would be 0.038 Singapore cents or 0.25% on a pro forma basis. 

6. Organic growth potential 

There are several catalysts to enhance the income profile as the properties are well-positioned to capture organic growth opportunities in the near term.

Existing colocation agreements at 9 Tai Seng Drive were contracted with end users between 2022 and 2025. The contracted colocation rates are estimated to be approximately 30% below comparable market colocation rates. Due to the tight vacancy rate of about 2% currently and supply constraints for data centre space in Singapore, the market expectation of colocation retail rates is approximately US$300 to US$400 (S$390 to S$520)15 per kW per month16. There are opportunities for organic growth at 9 Tai Seng Drive through potential rental uplifts when these colocation agreements are due for renewal due to the favourable demand-supply dynamics.

In addition, 9 Tai Seng Drive offers potential in the mid to long term for revenue growth via expansion of the existing IT capacity, including higher power usage, subject to obtaining the relevant approvals from the authorities. The Manager has a proven track record of delivering successful asset enhancement initiatives to optimise returns.

As the existing lease at 5 Science Park Drive has a remaining term of approximately 1.5 years and the existing rent is approximately 15% below current comparable market rent in one-north and SSP 1 districts, there is opportunity for organic growth through potential rental uplift when the existing lease term ends in 2026 due to limited availability and supply of business space in the one-north and SSP 1 districts.

Details of the Proposed Acquisitions

HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of CLAR (the “REIT Trustee”), has entered into a conditional unit purchase agreement with Perpetual (Asia) Limited (in its capacity as trustee of CapitaLand Data Centre Trust) to acquire 100.0% of the issued units in CLDCSG Trust which holds the property located at 9 Tai Seng Drive, Singapore 535227 (“Unit Purchase Agreement”).

The REIT Trustee has also entered into a conditional put and call option agreement with Science Park Property Trustee Pte. Ltd. (in its capacity as trustee of Science Park Property Trust 1), in relation to the acquisition of the 100.0% of the interest in the property located at 5 Science Park Drive, Singapore Science Park 1, Singapore 118265.

For the two Proposed Acquisitions, CLAR is expected to incur an estimated total acquisition cost of S$724.6 million (“Total Acquisition Cost”) comprising an estimated total purchase consideration of S$700.2 million17, the total acquisition fee payable to the Manager of S$7.0 million (being 1% of the agreed property value of each of 9 Tai Seng Drive and 5 Science Park Drive) (“Acquisition Fees”) and estimated professional and other fees of approximately S$17.4 million.

The agreed property value of 9 Tai Seng Drive is approximately S$455.2 million. It was negotiated on a willing-buyer and willing-seller basis and is at a 2.2% discount to the average of two independent market valuations of S$465.5 million as at 15 May 202518.

The purchase consideration of 5 Science Park Drive of S$245.0 million, inclusive of the 5 SPD Deferred Consideration, was negotiated on a willing-buyer and willing-seller basis and is at a 7.0% discount to the average of two independent market valuations of S$263.5 million as at 15 May 202519.

The Proposed Acquisitions constitute an “interested person transaction” under the listing manual of the Singapore Exchange Securities Trading Limited (“Listing Manual”) and an “interested party transaction” under Appendix 6 of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (“Property Funds Appendix”). As the aggregate value for the Proposed Acquisitions exceeds 5% of CLAR’s latest audited net asset value / net tangible assets as at 31 December 2024, the Proposed Acquisitions are subject to the approval of unitholders of CLAR (“Unitholders”). Further, as the Proposed Acquisitions constitute an “interested party transaction” under the Property Funds Appendix, the Acquisition Fees will be paid in the form of new units in CLAR (the “Acquisition Fee Units”), which shall not be sold within one year from the date of issuance.

The REIT Manager intends to finance the Total Acquisition Cost, less the Acquisition Fees (which will be paid through the issue of the Acquisition Fee Units) through a combination of net proceeds from an equity fund raising and debt financing.

A circular will be issued to Unitholders in due course, together with a notice of extraordinary general meeting, for the purpose of seeking the approval of Unitholders for the Proposed Acquisitions.

Following the completion of the Proposed Acquisitions, CLAR will own 232 properties comprising 98 properties in Singapore, 34 properties in Australia, 50 properties in the US and 50 properties in the UK/Europe. 

Annex - Summary of 9 Tai Seng Drive

Annex - Summary of 5 Science Park Drive

Footnotes:

1. See footnote 17 for details.
2. See footnote 17 for details.
3. On a pro forma basis as at 31 March 2025.  
4. On a pro forma basis as at 31 December 2024.
5. On a pro forma basis as at 31 December 2024.
6. Further details on Singapore Science Park can be found at www.sciencepark.com.sg. 
7. JTC has, pursuant to the JTC lease and subject to the terms therein, granted a further lease term from 1 June 2025 to 31 May 2055 subject to the satisfaction of certain conditions (including the payment of land premium (and goods and services tax (“GST”)) and stamp duty for such further lease term). The grant of the further term is a condition precedent to the acquisition of the Proposed 9 Tai Seng Drive Acquisition under the Unit Purchase Agreement, accordingly, when the acquisition of the 9 Tai Seng Drive Target Trust (as defined below) is completed, the trustee of 9 Tai Seng Drive Target Trust will hold a leasehold term expiring on 31 May 2055.
8. Includes a new colocation agreement of 10.2% occupancy expected to commence on 20 June 2025.
9. Includes a new colocation agreement of 10.2% occupancy expected to commence on 20 June 2025.
10. The NPI yield is derived using the estimated NPI expected in the first year after the proposed acquisition of 9 Tai Seng Drive. 
11. The NPI yield is derived using the estimated NPI yield expected in the first year after the proposed acquisition of 5 Science Park Drive, and is calculated excluding the 5SPD Deferred Consideration.
12. The estimated pro forma impact is calculated based on, including but not limited to, the following assumptions: (i) CLAR had completed the Proposed Acquisitions on 1 January 2024 and held the properties through 31 December 2024; (ii) the Proposed Acquisitions were funded based on a funding structure of 40% debt and 60% equity; (iii) the Manager elects to receive its base fee 80% in cash and 20% in units of CLAR; and (iv) in respect of the proposed acquisition of 5 Science Park Drive, the 5SPD Deferred Consideration is not taken into account. See the announcement titled “The Proposed Acquisition Of The Data Centre Known As 9 Tai Seng Drive And The Business Space Property Known As 5 Science Park Drive” made by the Manager on 28 May 2025 for details of the assumptions for the pro forma financial effects of the Proposed Acquisitions. 
13. The DPU accretion for the proposed acquisition of 9 Tai Seng Drive assumes that, subject to the Inland Revenue Authority’s agreement, the 9 Tai Seng Drive Target Trust is an approved sub-trust and has been granted tax transparency on its income. 
14. Excluding the effect of the 5SPD Deferred Consideration of S$30.0 million, payable on 13 November 2026.
15. Based on USD/SGD of 1.30.
16. Source: DC Byte, Singapore Data Centre Market Landscape.
17. Comprising the sum of the estimated purchase consideration of S$471.0 million less the receivables, cash and payables of S$15.8 million in CLDCSG Trust (the “9 Tai Seng Drive Target Trust”), subject to post-completion adjustments, for the proposed acquisition of 9 Tai Seng Drive and the estimated purchase consideration of S$245.0 million for the proposed acquisition of 5 Science Park Drive.
18. The independent valuers, Jones Lang LaSalle Property Consultants Pte. Ltd. (“JLL”) and Savills Valuation And Professional Services (S) Pte Ltd were commissioned by the REIT Trustee and the REIT Manager, respectively. Both valuers’ valuations (S$465.0 million and S$466.0 million, respectively) were carried out using the discounted cash flow approach and the income capitalisation method.
19. The independent valuers, JLL and CBRE Pte. Ltd. were commissioned by the REIT Trustee and the REIT Manager, respectively. Both valuers’ valuations (S$265.0 million and S$262.0 million, respectively) were carried out using the discounted cash flow approach and the income capitalisation method.
20. Including a new colocation agreement of 10.2% occupancy expected to commence on 20 June 2025.
21. Upon renewal of the JTC lease. JTC has, pursuant to the JTC lease and subject to the terms therein, granted a further lease term from 1 June 2025 to 31 May 2055 subject to the satisfaction of certain conditions (including the payment of land premium (and GST) and stamp duty for such further lease term). The grant of the further term is a condition precedent to the acquisition of the Proposed 9 Tai Seng Drive Acquisition under the Unit Purchase Agreement, accordingly, when the acquisition of the 9 Tai Seng Drive Target Trust is completed, the trustee of the 9 Tai Seng Drive Target will hold a leasehold term expiring on 31 May 2055.

Release ID: 89161111