Ascendas REIT - Annual Report 2021

The Manager’s Review of FY2021 OUTLOOK In January 2022, the International Monetary Fund (IMF) lowered its global growth forecast for 2022 by 50 basis points to 4.4%. Global recovery is expected to continue at a more moderate pace weighed down by the surge in Omicron infections worldwide and supply chain disruptions. Singapore The Singapore economy expanded by 7.6% y-o-y in 2021, recovering from a 4.1% contraction in 2020. The Ministry of Trade and Industry (MTI) projected that the economy will grow at between 3.0% and 5.0% in 2022. With the high vaccination rate in Singapore, the government has allowed 50% of the workforce, and only fully vaccinated employees, to return to the office from 1 January 2022. Notwithstanding the gradual reopening in Singapore, the uncertainties posed by the Omicron wave and the large supply of new industrial properties completing in 2022 may put some pressure on rental rates and occupancy. Ascendas Reit’s Singapore portfolio worth S$9.9 billion comprises a variety of asset types, allowing it to serve a wide range of customers from industries including technology, life sciences, manufacturing and logistics across their entire chain of operations. As part of Ascendas Reit’s asset rejuvenation plan, several AEIs and redevelopment were completed recently to upgrade property specifications, unlock value through repositioning or meet green rating requirements. These properties are expected to generate higher returns for Ascendas Reit. Australia In 2021, the Australian economy grew 4.2% y-o-y. Gross Domestic Product (GDP) in Q4 2021 was 3.4% above Q4 2019 pre-pandemic levels (source: Australian Bureau of Statistics). Whilst the lockdowns and restrictions have largely been lifted at the end of 2021, some measures were re-introduced in early 2022 to combat the growing number of Omicron cases. The IMF projected the Australian economy to achieve a GDP growth of 4.1% in 2022. Two new logistics properties, 7 Kiora Crescent in Sydney and 500 Green Road in Brisbane, were completed in 1Q 2022 for S$90.2 million. In 4Q 2022, MQX4, Ascendas Reit’s new suburban office in Sydney, is expected to complete, which will expand its footprint within the Macquarie Park innovation district. Total investment properties in Australia is expected to grow to S$2.6 billion after including these properties. With average rent escalations of approximately 3% per annum, the Australian portfolio provides a stable income stream for Ascendas Reit. Ascendas Reit 56