CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
William Tay, executive director and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s primary sale and leaseback acquisition in the US and including this Class A logistics estate, modern logistics properties will certainly account for 42.3% of our United States logistics properties under administration. With the extensive rent in effect, this real estate will further boost CLAR’s resistant income stream, and we expect the two brand-new properties to contribute positively to our continued returns.”
The wholly taken up property, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly raise CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The first-year net property income (NPI) return of the suggested acquisition is about 7.6% pre-transaction prices and 7.4% post-transaction prices. The pro forma effect on the distribution per unit (DPU) for the financial year finished Dec 31, 2023 is expected to be an improvement of about 0.019 Singapore cents, or a DPU accretion of 0.1%, presuming the proposed procurement was finished on Jan 1, 2023.
After including transaction-related costs and costs of $1.7 million, along with a $1.5 million acquisition fee settled to the manager, the total acquisition expense will be $153.4 million.
CapitaLand Ascendas REIT (CLAR) has offered to acquire DHL Indianapolis Logistics Facility, a Class A logistics building, from Exel Inc. d/b/a DHL Supply Chain (DHL United States) for $150.3 million. This is a 4.1% discount rate to the independent market assessment of the real estate as at Jan 1, 2025.
Following the acquisition, DHL USA will become part of a long-term leaseback till December 2035 of the building’s entire gross floor surface area (GFA) with options to extend for two added five-year terms.
The manager means to finance the complete procurement cost through a mix of inner resources, divestment proceeds and/or existing debt centers, according to a Dec 17 press release.
Apart from this newest real estate in Indianapolis, CLAR’s logistics assets in the US are located in Kansas City, Chicago and Charleston.
Completed in 2022, the commercial property lies in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is an entirely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The purchase will raise the worth of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics presence in the US will definitely increase to 20 properties across four towns with a complete GFA of about 5.1 million sq ft.
The lengthy lease term of about 11 years with integrated lease acceleration of 3.5% per annum will give income stability and enhance the durability of CLAR’s portfolio, says the supervisor.
