Ascott Residence Trust (ART) went public on the Singapore Exchange in 2006.
Back then, ART had a portfolio of just 12 properties worth S$855 million across South East Asia and Singapore, focusing on serviced residences or rental housing properties.
ART then merged with Ascendas Hospitality Trust (A-HTrust) in 2019, which grew its portfolio by more than 8x to S$7.6 billion. It became the largest hospitality trust in the Asia-Pacific region.
In September 2022, ART renamed itself to CapitaLand Ascott Trust (CLAS). It did this for branding purposes to align with CapitaLand Investment.
Today, CLAS trades at ~S$0.92 per unit, implying a price to NAV ratio of ~0.82x and a market cap of S$3.5 billion.
At a distribution yield of ~6.6% dividend, is this Singapore blue-chip REIT a good buy today? Let’s dive in.
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CapitaLand Ascott Trust’s Global Portfolio
CLAS’s investment strategy focuses on income-producing real estate and real estate-related assets used as serviced residences, rental housing properties, student accommodation and other hospitality assets without geographic restrictions.
So far, this Singapore REIT giant has grown significantly. It now has 101 properties in 16 countries. This includes:
- 51 serviced residences
- 18 hotels
- 23 rental housing spaces
- 9 student accommodations
Now, CLAS’s 56% of its portfolio is Asia focused, 26% is located in Europe, with the remaining 18% of the portfolio located in the US.
It’s worth noting 83% of CLAS’s portfolio consists of hotels and serviced residences.
However, management is looking to cut that exposure down to 70% – 75% and increase exposure into rental housings or student accommodations.
CapitaLand Ascott Trust Latest Financial Quarter
For CLAS’s first half of 2025, performance was good. When compared against the first half of 2024:
- Revenue improved by 3% to S$398.5 million
- Net Property Income improved by 6% to S$182.5 million
- Distribution per stapled security declined by 1% to 2.53 cents
- Revenue per available unit (RevPAU) increased by 3% to S$159
Stronger operating performance, portfolio reconstitution and asset enhancement initiatives drove the improvement in revenue and gross profit.
It helped against the depreciation of foreign currencies against SGD, given that over 80% of CLAS’s portfolio is foreign currency denominated.
While CLAS is heavily diversified in terms of geography, its five key markets are Australia, Japan, Singapore, UK and US.
CLAS’s Australia portfolio saw a boost in RevPAU by 15% due to higher occupancies, driven by group bookings and events.
In Australia, CLAS’s properties cater predominantly to domestic guests.
Therefore Q3 demand is expected to be higher because of sporting events such as State of Origin, British and Irish Lions Rugby Tour and the Sydney Marathon.
On the other hand, CLAS saw its RevPAU drop significantly for its Japan portfolio.
This was due to the addition of a recently acquired property in Jan 2025, called Chisun Budget Kanazawa Ekimae, which has lower RevPAUs.
Furthermore, management does remain positive on outlook.
They expect an increase in demand for short term accommodation from international leisure travellers with the cherry blossom season coming up alongside the World Athletics Championships in Tokyo.
Balance sheet profile is healthy
When it comes to CLAS’s debt situation, it’s much safer than its peers. So far, it has an aggregate leverage ratio of 39.6%, which gives it the ability to borrow up to S$1.8 billion before breaching the regulatory limit of 50%.
Furthermore, CLAS’s interest coverage ratio is 3.1x. Even in the worst case scenarios, such as a 100bps spike in interest rates, CLAS’s interest coverage ratio would be 2.4x.
Currently, the weighted average interest rate for CLAS is about 2.9%, which is lower than most of its peers, which I’m guessing is due to the size and lower leverage that it has.
CLAS’s debt is also well staggered. On average, its debt expires every 3.4 years.
Compared to other REITs or stapled securities, I see that CLAS is much more prudent with its debt management, because 82% of its debt has fixed interest rates.
With this in mind, I suspect CLAS won’t be benefitting as much as other REITs when interest rates come down globally.
In fact, its borrowing cost is expected to remain the same, whereas most other REITs will expect their borrowing costs to decline.
Anyways, only 24% of CLAS’s debt is expiring within the next two years, so management won’t be tapping that much into financial markets for the time being.
My final thoughts
At a current price to NAV ratio of 0.82x, I’d say this is one of the cheaper Singapore blue-chip REITs. The thing is, CLAS is the largest hospitality trust in APAC and from a debt perspective, its balance sheet is really defensive.
What’s more, it has properties in both Asian and Western regions, which help diversify risks arising from any specific one country.
