Ascendas REIT - Annual Report 2021

The Manager’s Review of FY2021 INVESTMENTS Despite the emerging global challenges against a backdrop of uncertainty, theManager remained agile and leveraged on its strong foundation to diversify its portfolio across geographies and developed sectors. 2021 was a significant year of breakthroughs, the Manager attained a record achievement of S$2.1 billion worth of new investments including maiden investments in data centres in Europe and logistics properties in USA. In January 2021, the acquisition of a suburban office, 1-5 Thomas Holt Drive, in Sydney, was completed for S$284.0 million. It is located in Macquarie Park, the largest metropolitan market in Australia and home to global players across resilient industries such as the pharmaceutical, technology, electronics and telecommunications sectors. This acquisition is the first of two suburban office investments in the Macquarie Park precinct; the ongoing development of MXQ4 located at 1 Giffnock Avenue is targeted to complete in 4Q 2022. With the burgeoning growth in digitalisation and cloud computing, the demand for data centres continues to be highly sought after. In March 2021, the Manager invested S$904.6 million in 11 well- occupied data centres located primarily across the top three European data centre markets of London, Amsterdam and Paris. The acquisition marked Ascendas Reit’s first foray into the overseas data centre market and complements its existing data centre portfolio in Singapore. On the whole, this acquisition has scaled up the sector’s contribution to 9% (S$1.5 billion) of investment properties under management. Rounding up the first half of 2021, the Manager attained full ownership of Galaxis in Singapore, through the purchase of the remaining 75% stake in June 2021 at S$534.4 million. This premium business park property is strategically located in the heart of one-north and extends Ascendas Reit’s foothold in the precinct, which is known to attract an array of tenants from growth sectors such as biomedical sciences; information and communications technologies and media; science and research institutes, as well as start-ups. Shortly after, one-north business park also welcomed the much-anticipated completion of Grab Headquarters in July 2021. The built-to-suit development worth S$184.6 million is fully leased to the regional tech champion and serves as its largest Research & Development centre. The building is designed with lush greenery and communal spaces, providing Grab’s employees with a sustainable workplace environment. In recent years, the growth of logistics as an asset class has deepened with strong demand for well- located warehouses and distribution centres in densely populated regions in the USA. In November 2021, the Manager embarked on its first venture into the USA logistics market by acquiring a portfolio of 11 last-mile assets in Kansas City worth S$207.8 million. The logistics portfolio which had an occupancy rate of 92.6% upon acquisition, attained full occupancy as at 31 December 2021. The properties are situated within four submarkets and in close proximity to the interstate highways and well supported by established transport infrastructure, providing tenants good access to a broad base of customers and employees. Before the year closed, the Manager announced the partnership with CapitaLand Development to jointly redevelop 1 Science Park Drive in Singapore into a life science and innovation campus for a total development cost of approximately S$883 million. Ascendas Reit has a 34% stake in this transformational redevelopment worth S$300.2 million. This rejuvenation will create a world-class hub for R&D and innovation with vibrant work- live-play elements and support the transformation of Singapore Science Park 1. Expected to be fully completed by 2025, 1 Science Park Drive caters to demand from tenants in new economy sectors such as biomedical sciences, digital and technology, which are continuing to expand in Singapore amidst a greater focus on healthcare, deep tech and accelerating digital transformation. To optimise portfolio returns to Unitholders, the Manager actively identifies assets that are suitable for redevelopment and asset enhancement. Three asset enhancement initiatives (AEIs) across Singapore andAustraliawere completed in 2021 for S$23.3million. Seven development and AEI projects worth S$685.2 million were on-going as at 31 December 2021. Three of these projects namely 500 Green Road in Brisbane, Australia, 7 Kiora Crescent in Sydney, Australia, and UBIX in Singapore were completed in 1Q 2022. Ascendas Reit 38