Ascendas REIT - Annual Report 2021

The Manager’s Review of FY2021 USA In 2021, the USA economy grew 5.7% y-o-y compared to a 3.4% y-o-y contraction in 2020. Consumer spending helped support GDP growth in 4Q 2021 which rose 6.9% q-o-q compared to the 2.3% increase in 3Q 2021 (source: US Bureau of Economic Analysis). GDP is expected to expand by 4.0% in 2022 (source: IMF). The newly acquired portfolio of logistics properties in Kansas City achieved 100% occupancy, an improvement from 92.6% when the acquisition was completed in November 2021. The logistics portfolio is expected to remain resilient amidst the low vacancy rate of 4.7% (source: Newmark Zimmer, 4Q 2021) and strong demand for logistics space in the Kansas City market. As companies continue to re-evaluate their real estate footprint, leasing activity for some business park properties is expected to remain slow. Nevertheless, the performance of Ascendas Reit’s USA portfolio is underpinned by a long WALE of 4.4 years and a high proportion of leases with rent escalation clauses of between 2.5% and 4.0% per annum. UK/Europe UK’s GDP rose 7.5% y-o-y in 2021 compared to a 9.4% contraction in 2020. Q4 2021 GDP is now just 0.4% below its pre-COVID level (Q4 2019) (source: Office for National Statistics). UK’s economy is projected to deliver a growth of 4.7% in 2022 (source: IMF). The economies of Western Europe have largely rebounded from the COVID-19 disruptions, with France’s 2021 economic growth strongest in 52 years at 7% (source: The National Institute of Statistics and Economic Studies of France) and the European Commission forecasting GDP growth for the Netherlands in 2021 coming in at about 4%. In the UK/Europe, Ascendas Reit doubled its assets under management to S$1.8 billion in FY2021 after the acquisition of 11 data centres. The UK/Europe portfolio has a long WALE of 5.7 years and is poised to benefit from the strong e-commerce adoption and digitalisation of activities. Conclusion The trajectory and future impact of the pandemic remains unpredictable. However, the demand for Ascendas Reit’s asset classes is expected to remain healthy. The Manager will continue to exercise prudence, maintain a strong balance sheet and proactively manage its S$16.3 billion portfolio to deliver sustainable returns for its Unitholders. Read more about the economic and industrial property market trends and outlook of Ascendas Reit’s markets in the Independent Market Study Report 2021 available at: ir.ascendas-reit.com/ar.html Annual Report 2021 57