CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The first-year net property income (NPI) yield of the recommended acquisition is about 7.6% pre-transaction costs and 7.4% post-transaction expenses. The pro forma impact on the distribution per unit (DPU) for the financial year concluded 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 purchase was completed on Jan 1, 2023.
William Tay, executive head and CEO of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s first sale and leaseback procurement in the US and including this Class A logistics property, modern logistics assets will certainly make up 42.3% of our United States logistics possessions under administration. With the extensive contract in effect, this property will better enhance CLAR’s resistant earnings stream, and we expect both new properties to contribute favorably to our extended returns.”
After adding transaction-related charges and costs of $1.7 million, along with a $1.5 million procurement cost paid to the supervisor, the complete acquisition cost will most likely be $153.4 million.
Aside from this newest real estate in Indianapolis, CLAR’s logistics assets in the United States are located in Kansas City, Chicago and Charleston.
CapitaLand Ascendas REIT (CLAR) has recently submitted to acquire 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% price cut to the independent market valuation of the property as at Jan 1, 2025.
The procurement will certainly raise the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this procurement, CLAR’s logistics presence in the USA will broaden to 20 properties throughout four towns with a total GFA of about 5.1 million sq ft.
The long lease term of roughly 11 years with integrated rental fee escalation of 3.5% per year will certainly provide earnings security and reinforce the durability of CLAR’s profile, says the supervisor.
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.
Following the acquisition, DHL U.S.A. will enter into a long-term leaseback till December 2035 of the real estate’s complete gross floor area (GFA) with options to extend for 2 additional five-year terms.
The completely occupied building, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly boost CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
The manager plans to pay for the total procurement charge with a blend of inner sources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 news release.
