CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Following the purchase, DHL United States will become part of an extended leaseback till December 2035 of the building’s whole gross flooring area (GFA) with possibilities to renew for 2 extra five-year terms.
The long lease term of approximately 11 years with integrated rental fee escalation of 3.5% per year will certainly offer income stability and enhance the durability of CLAR’s profile, claims the supervisor.
Completed in 2022, the property stands 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) yield of the suggested acquisition is around 7.6% pre-transaction expenses and 7.4% post-transaction costs. The pro forma influence on the distribution per unit (DPU) for the financial year finished Dec 31, 2023 is expected to be an improvement of approximately 0.019 Singapore cents, or a DPU accumulation of 0.1%, thinking the suggested procurement was completed on Jan 1, 2023.
Aside from this newest real estate in Indianapolis, CLAR’s logistics assets in the US are located in Kansas City, Chicago and Charleston.
The wholly occupied building, with its weighted average lease to expiry (WALE) of about 11 years, will certainly boost CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The manager plans to finance the overall acquisition fee with a blend of internal sources, divestment proceeds and/or existing debt centers, according to a Dec 17 news release.
Aurelle of Tampines Sim Lian Group
After including transaction-related costs and costs of $1.7 million, along with a $1.5 million procurement cost paid to the manager, the complete procurement cost are going to be $153.4 million.
The procurement will enhance the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this purchase, CLAR’s logistics track in the America will increase to 20 properties throughout 4 towns with a total GFA of approximately 5.1 million sq ft.
CapitaLand Ascendas REIT (CLAR) has recently proposed to get 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 to the independent market valuation of the property as at Jan 1, 2025.
William Tay, executive head and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s very first sale and leaseback acquisition in the US and including this Class A logistics estate, modern logistics assets will account for 42.3% of our US logistics properties under control. With the long lease in position, this real estate is going to better enhance CLAR’s resilient earnings stream, and we expect both brand-new properties to add efficiently to our extended returns.”
