CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The wholly occupied building, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly increase CLAR’s United States 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 assets in the United States are located in Kansas City, Chicago and Charleston.
The purchase will boost 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 footprint in the US will definitely expand to 20 properties throughout 4 cities with a total GFA of approximately 5.1 million sq ft.
CapitaLand Ascendas REIT (CLAR) has already offered to get 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 rate to the independent market assessment of the property as at Jan 1, 2025.
The long lease term of about 11 years with inbuilt rental fee rise of 3.5% per annum will certainly supply earnings security and strengthen the resilience of CLAR’s selection, states the supervisor.
After adding transaction-related costs and costs of $1.7 million, in addition to a $1.5 million procurement cost settled to the supervisor, the overall procurement price will be $153.4 million.
Finished in 2022, the property lies in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is a completely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
William Tay, executive head and CEO of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s very first sale and leaseback acquisition in the America and including this Class A logistics property, modern logistics properties will certainly account for 42.3% of our US logistics possessions under administration. With the long rent in position, this real estate is going to better enhance CLAR’s resistant earnings stream, and we expect both brand-new properties to add favorably to our extended returns.”
The manager plans to finance the complete purchase charge through a blend of internal sources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 press release.
Following the procurement, DHL United States will become part of a long-term leaseback till December 2035 of the real estate’s complete gross floor area (GFA) with possibilities to continue for two additional five-year terms.
The first-year net property income (NPI) revenue of the recommended acquisition is approximately 7.6% pre-transaction costs and 7.4% post-transaction prices. The pro forma impact on the distribution per unit (DPU) for the financial year finished Dec 31, 2023 is anticipated to be an improvement of about 0.019 Singapore cents, or a DPU rise of 0.1%, presuming the suggested procurement was finished on Jan 1, 2023.
