Singapore – CapitaLand Ascendas REIT (CLAR), a leading real estate investment trust listed on the Singapore Exchange, announced on May 28th its acquisition of two key assets in Singapore for approximately S$700 million (approximately US$518 million). This acquisition includes 9 Tai Seng Drive, a Tier III data center, and 5 Science Park Drive, a premium business park.
Strategic Acquisitions to Strengthen Portfolio
CLAR stated that this acquisition will further solidify its presence in the Singapore market and deepen its exposure to the technology sector. CLAR's management expects both 9 Tai Seng Drive and 5 Science Park Drive, which are currently 100% leased to reputable and stable end-users and tenants in the digital, e-commerce, and financial services industries, to provide stable income streams. They also emphasized that these assets will not only contribute positively to long-term returns but also possess organic growth potential through rent escalations and asset enhancement opportunities.
William Tay, CEO and Executive Director of CLAR, commented, "The acquisition of 9 Tai Seng Drive and 5 Science Park Drive will further strengthen our position in Singapore, CLAR's core market. This strategic addition will increase Singapore's weighting in CLAR's portfolio to approximately 67% of total assets under management (AUM)."
Expanding Data Center and Business Park Segments
This acquisition is set to significantly expand CLAR's data center segment within its portfolio. 9 Tai Seng Drive, a Tier III colocation data center, will increase CLAR's data center AUM by 32.8% to approximately S$1.9 billion. Of this, 54% will be located in Singapore and 46% in the UK and Europe. 9 Tai Seng Drive is conveniently located a five-minute drive from CLAR's existing data centers, Kim Chuan Telecommunications Complex and 38A Kim Chuan Road, and is situated in a network-dense area favored by cloud service providers and telecommunications operators.
Meanwhile, 5 Science Park Drive is a premium business park located within the "Geneo" life sciences and innovation cluster in Singapore Science Park 1. This acquisition will increase CLAR's Singapore business space and life sciences AUM by 4.8% to approximately S$5.7 billion. Notably, this asset is expected to create synergies with the adjacent 1 Science Park Drive development, in which CLAR holds a 34% stake. 1 Science Park Drive was completed in March 2025 and is almost fully leased.
Financial Impact and Future Outlook
CLAR anticipates this acquisition to contribute to an increase in distribution per unit (DPU), which is expected to positively impact unitholders. Both assets were independently valued by Jones Lang LaSalle Property Consultants and Savills, with 9 Tai Seng Drive valued at S$465.5 million and 5 Science Park Drive at S$263.5 million. The total acquisition cost, including fees and other related expenses, is approximately S$724.6 million.
Through this acquisition, the value of CLAR's Singapore portfolio will increase by 6.6% to approximately S$11.7 billion, representing 67% of CLAR's total AUM of S$17.6 billion. CLAR stated its focus on prudently expanding its portfolio through continuous acquisitions and developments, and on increasing DPU.
In recent years, CLAR has actively diversified and grown its portfolio. In 2023, it acquired 'The Shugart,' a business park facility in Singapore, and 'The Chess Building,' a data center in northwest London, UK, both of which contributed to an increase in net property income (NPI) in the first half of 2024. CLAR plans to continue leveraging global technological advancements and digital transformation trends to transition its portfolio towards the technology sector and diversify and strengthen its client base. This demonstrates CLAR's strong commitment to providing stable and sustainable returns to investors.
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