CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The acquisition will 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 USA will increase to 20 properties throughout 4 metros with a complete GFA of around 5.1 million sq ft.
The manager plans to finance the complete procurement cost with a combination of inside resources, divestment proceeds and/or existing debt centers, according to a Dec 17 news release.
After adding transaction-related costs and costs of $1.7 million, together with a $1.5 million acquisition cost paid off to the supervisor, the total procurement price will most likely be $153.4 million.
Pinetree Hill showflat location
The lengthy lease term of roughly 11 years with built-in lease escalation of 3.5% per annum will certainly provide income security and strengthen the durability of CLAR’s collection, states the supervisor.
The completely taken up property, with its weighted average lease to expiry (WALE) of about 11 years, will boost CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
Apart from this most recent property in Indianapolis, CLAR’s logistics possessions in the US are located in Kansas City, Chicago and Charleston.
The first-year net property income (NPI) return of the suggested procurement is around 7.6% pre-transaction expenses and 7.4% post-transaction expenses. The pro forma impact on the distribution per unit (DPU) for the financial year ended Dec 31, 2023 is anticipated to be an improvement of approximately 0.019 Singapore cents, or a DPU accretion of 0.1%, assuming the proposed procurement was completed on Jan 1, 2023.
Following the acquisition, DHL USA will enter into a long-term leaseback till December 2035 of the property’s overall gross floor area (GFA) with choices to renew for two extra five-year terms.
Finished in 2022, the property is located 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.
CapitaLand Ascendas REIT (CLAR) has submitted to acquire DHL Indianapolis Logistics Hub, a Class A logistics commercial property, from Exel Inc. d/b/a DHL Supply Chain (DHL U.S.A.) for $150.3 million. This is a 4.1% discount to the independent market assessment of the real estate as at Jan 1, 2025.
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 very first sale and leaseback acquisition in the US and including this Class A logistics estate, modern logistics properties will certainly make up 42.3% of our US logistics properties under administration. With the extensive contract in effect, this property will better improve CLAR’s resistant earnings stream, and we expect the two new real estates to add positively to our continued returns.”
