CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The completely taken up property, with its weighted average lease to expiry (WALE) of about 11 years, will certainly boost CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
Finished in 2022, the property rises 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 lengthy lease term of approximately 11 years with inbuilt rental fee escalation of 3.5% per year will certainly give revenue stability and strengthen the durability of CLAR’s portfolio, claims the manager.
The manager intends to fund the total purchase cost through a blend of inside resources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 news release.
After adding transaction-related charges and expenditures of $1.7 million, together with a $1.5 million procurement fee paid to the supervisor, the complete purchase price will most likely be $153.4 million.
CapitaLand Ascendas REIT (CLAR) has offered to acquire DHL Indianapolis Logistics Center, a Class A logistics commercial property, 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 evaluation of the estate as at Jan 1, 2025.
The first-year net property income (NPI) yield of the recommended purchase is around 7.6% pre-transaction prices and 7.4% post-transaction prices. The pro forma influence on the distribution per unit (DPU) for the financial year stopped Dec 31, 2023 is anticipated to be an improvement of around 0.019 Singapore cents, or a DPU increase of 0.1%, thinking the suggested purchase was finished on Jan 1, 2023.
Aside from this most recent real estate in Indianapolis, CLAR’s logistics properties in the US rise in Kansas City, Chicago and Charleston.
Following the procurement, DHL U.S.A. will participate in a continued leaseback till December 2035 of the real estate’s entire gross floor surface area (GFA) with choices to extend for 2 additional five-year terms.
The acquisition will certainly raise the value 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 presence in the US will expand to 20 properties across four cities with a complete GFA of around 5.1 million sq ft.
William Tay, executive director and chief executive officer of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s very first sale and leaseback acquisition in the America and including this Class A logistics property, modern-day logistics investments will make up 42.3% of our US logistics possessions under management. With the lengthy rent in position, this real estate is going to further improve CLAR’s resilient revenue stream, and we anticipate both new properties to contribute favorably to our continued returns.”
