CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
CapitaLand Ascendas REIT (CLAR) has already submitted to obtain DHL Indianapolis Logistics Center, 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 to the independent market assessment of the estate as at Jan 1, 2025.
The wholly occupied property, with its weighted average lease to expiry (WALE) of around 11 years, will certainly boost CLAR’s United States portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
The acquisition will certainly enhance the worth of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this procurement, CLAR’s logistics track in the US will expand to 20 properties throughout four metros with a total GFA of about 5.1 million sq ft.
After adding transaction-related costs and costs of $1.7 million, along with a $1.5 million acquisition cost settled to the supervisor, the complete purchase cost will be $153.4 million.
The manager means to finance the complete acquisition fee via a combination of internal sources, divestment proceeds and/or existing debt facilities, according to a Dec 17 announcement.
Following the acquisition, DHL U.S.A. will become part of a long-term leaseback till December 2035 of the real estate’s whole gross floor surface area (GFA) with options to renew for two extra five-year terms.
Completed in 2022, the commercial property lies in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The first-year net property income (NPI) revenue of the recommended acquisition is approximately 7.6% pre-transaction costs and 7.4% post-transaction costs. The pro forma effect on the distribution per unit (DPU) for the financial year ended Dec 31, 2023 is anticipated to be an improvement of around 0.019 Singapore cents, or a DPU rise of 0.1%, assuming the proposed procurement was completed on Jan 1, 2023.
Cuscaden Reserve 8 Cuscaden Road
William Tay, executive head and CEO of the manager, mentions: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s first sale and leaseback purchase in the US and including this Class A logistics property, modern-day logistics assets will make up 42.3% of our United States logistics assets under administration. With the lengthy lease in effect, this property is going to better boost CLAR’s durable revenue stream, and we anticipate both new real estates to add favorably to our continued returns.”
The long lease term of around 11 years with integrated rental fee acceleration of 3.5% per year will certainly supply revenue security and enhance the durability of CLAR’s profile, says the supervisor.
Besides this latest property in Indianapolis, CLAR’s logistics assets in the United States rise in Kansas City, Chicago and Charleston.
