CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
William Tay, executive head and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s primary sale and leaseback purchase in the America and including this Class A logistics estate, modern-day logistics assets will represent 42.3% of our United States logistics possessions under management. With the lengthy lease in position, this property will further improve CLAR’s resilient income stream, and we anticipate both brand-new properties to contribute favorably to our extended returns.”
Following the purchase, DHL USA will enter into a long-term leaseback till December 2035 of the real estate’s entire gross floor surface area (GFA) with opportunities to renew for two added five-year terms.
The first-year net property income (NPI) yield of the suggested procurement is approximately 7.6% pre-transaction costs and 7.4% post-transaction prices. The pro forma influence on the distribution per unit (DPU) for the financial year concluded Dec 31, 2023 is anticipated to be an improvement of approximately 0.019 Singapore cents, or a DPU increase of 0.1%, assuming the proposed acquisition was completed on Jan 1, 2023.
Besides this newest property in Indianapolis, CLAR’s logistics assets in the United States rise in Kansas City, Chicago and Charleston.
The procurement will 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 footprint in the America will increase to 20 properties across 4 cities with an overall GFA of about 5.1 million sq ft.
After adding transaction-related costs and costs of $1.7 million, in addition to a $1.5 million acquisition cost paid to the manager, the total acquisition cost are going to be $153.4 million.
The manager means to fund the total acquisition charge through a combination of inner sources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 announcement.
CapitaLand Ascendas REIT (CLAR) has already submitted to get DHL Indianapolis Logistics Center, a Class A logistics property, 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 valuation of the real estate as at Jan 1, 2025.
Finished in 2022, the commercial property is located 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 fully occupied property, with its weighted average lease to expiry (WALE) of about 11 years, will certainly enhance CLAR’s United States profile WALE from 4.2 years to 4.7 years on a pro forma basis.
The long lease term of approximately 11 years with integrated lease acceleration of 3.5% per annum will certainly give income security and enhance the durability of CLAR’s collection, states the supervisor.
