CapitaLand Ascendas REIT proposes to acquire three industrial and logistics properties in Singapore for $565.8 mil
CapitaLand Ascendas REIT (CLAR) is proposing to acquire 3 real properties in Singapore for a full consideration of $565.8 million, which includes the estimated upfront land and enhancement premiums of $33.2 million. The accumulated of the account is independently worth at around $589 million.
” These accretive procurements build on our current acquisitions of a Tier III colocation data centre and a premium business spot property which were completed in August,” claims William Tay, executive supervisor and CEO of CLAR’s manager.
The ideal real properties are fully occupied by 19 renters with a long weighted average lease expiry (WALE) of around 5.5 years. These lessees are publicly listed companies and global firms in sectors such as electronics & semiconductors, transportation & logistics, precision manufacturing in addition to drugs & biology. CLAR even expects rent growth chances with rental escalations in most of the leases varying from 1% to 5% per annum. In-place rents are about 15% below market rents, states the REIT manager in its Oct 7 news.
The account, that is composed of a four-storey ramp-up logistics real estate at 2 Pioneer Market 1; Tuas Connection, a light industrial property on Tuas Loop comprising 15 double-storey industrial units; and an eight-storey high-specifications industrial property at 9 Kallang Sector, will increase the value of CLAR’s Singapore account to about $12.3 billion. Upon the conclusion of the procurement around 1Q2026, CLAR’s Singapore accounts are going to make up 68% of its complete assets under management (AUM).
According to the purchases, CLAR’s trustee has entered into conditional put and call choice contracts with DBS Trustee Limited for 2 Pioneer Sector 1 and Tuas Connection. DBS Trustee is the trustee of Supreme REIT.
Should the acquisitions be completed on Jan 1, 2024, CLAR’s DPU is expected to improve by around 0.124 cents or 0.8% for the FY2024 ended Dec 31, 2024 on a pro forma basis.
He includes that the buildings’ “sturdy lease profile” is a “uncommon and appealing possibility” in Singapore’s industrial real estate market and will “improve the durability of CLAR’s revenue stream.”
The proposed acquisition is assumed to be accretive to CLAR’s distribution per unit (DPU). The anticipated first year net real estate yield is about 6.4% pre-transaction fees and 6.1% post-transaction prices.
CLAR’s trustee has also become part of a share sale contract with Supreme REIT and Clay SG Holdings I Pte. Ltd to get 100% of the released share capital of Waterbay Investment Pte. Ltd., the listed owner of the property located at 9 Kallang Sector.
