CapitaLand Ascendas REIT issues clarification in response to article on Changi Business Park

SINGAPORE: CapitaLand Ascendas REIT (CLAR) has clarified to The Independent Singapore that it has a well-diversified portfolio, after Bloomberg reported on the occupancy rate of one of its properties at Changi Business Park.

CLAR owns Hansapoint, a seven-story development within Changi Business Park. The Bloomberg piece noted that after the financial firm UBS downsized at the business park, Hansapoint’s occupancy was only at 36.5 at the end of last year, after having been nearly full previously.

In our coverage of the issue, TISG reported that some units at Changi Business Park have been offered at a 3-for-2 rate, which means that if renters sign a new lease for three years, they get a full year of rent free of charge. The Bloomberg article noted that some of these units are at Hansapoint and other CLAR properties.

CLAR clarified on Friday (7 June) that its properties boast higher than average occupancy rates, with its business space and life sciences portfolio staying robust with positive rental reversions as well as a stable occupancy rate.

“The properties that are owned and managed by CLAR in Changi Business Park each contribute less than 4 per cent to CLAR’s monthly revenue figures,” a spokesman from CLAR told TISG.

Perhaps more importantly, CLAR is in active discussions with prospects for Changi Business Park, the spokesperson told TISG, adding that CLAR “consistently employs a wide range of innovative incentives to engage with its extensive network of prospects and existing tenants.”

The spokesman added: “As of 31 December 2023, the occupancy rate of CLAR’s business space and life sciences portfolio in Singapore was 83.8 per cent. This occupancy rate exceeds the industrial average of 78.0 per cent for business parks, based on JTC’s latest 1Q 2024 quarterly market report.”

The company also has a global network comprising of 1,790 tenants from more than 20 industries.

CLAR has also taken proactive measures to enhance the performance of its business space and life sciences properties. At business space property The Alpha, a gross revenue of S$9.4 million was recorded last year after its asset enhancement initiative (AEI) was completed in September, marking a 29 per cent uptick from 2019’s gross revenue of S$7.3 million.

At present, CLAR has five properties in the country that are seeing redevelopments and AEI to refresh existing spaces and draw in new tenants. 1 Science Park Drive should be ready by the second quarter of 2025, and 27 IBP by the first quarter of 2026.

“Singapore remains a vibrant hub for diverse business sectors, continuously attracting leasing interest from various industries. We are confident of the resilience of our business space and life sciences portfolio and remain committed to providing high-quality locations that address the changing market and tenant requirements,” CLAR’s spokesman added. /TISG

Read also: Bloomberg dubs Changi Business Park’s low occupancy a “blow to SG’s regional hub ambitions”