CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The first-year net property income (NPI) return of the suggested acquisition is around 7.6% pre-transaction prices and 7.4% post-transaction expenses. The pro forma influence on the distribution per unit (DPU) for the financial year ended Dec 31, 2023 is anticipated to be an improvement of around 0.019 Singapore cents, or a DPU accumulation of 0.1%, presuming the recommended acquisition was finished on Jan 1, 2023.
Besides this most recent property in Indianapolis, CLAR’s logistics properties in the United States are located in Kansas City, Chicago and Charleston.
After including transaction-related fees and costs of $1.7 million, together with a $1.5 million acquisition cost paid to the manager, the complete acquisition expense will most likely be $153.4 million.
The manager plans to fund the complete purchase fee through a blend of internal sources, divestment proceeds and/or existing debt facilities, according to a Dec 17 news release.
Following the purchase, DHL United States will participate in an extended leaseback till December 2035 of the property’s overall gross floor surface area (GFA) with opportunities to extend for 2 additional five-year terms.
The Arcady @ Boon Keng KSH Holdings Limited
Finished in 2022, the estate 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.
William Tay, executive director and CEO of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s very first sale and leaseback acquisition in the US and including this Class A logistics estate, contemporary logistics assets will certainly account for 42.3% of our US logistics possessions under administration. With the long lease in place, this real estate is going to further boost CLAR’s durable earnings stream, and we expect both new properties to add positively to our long-term returns.”
The long lease term of about 11 years with inbuilt lease escalation of 3.5% per year will certainly give revenue security and reinforce the durability of CLAR’s profile, says the manager.
The acquisition will certainly boost the value of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this purchase, CLAR’s logistics presence in the America will definitely broaden to 20 properties throughout four towns with a complete GFA of approximately 5.1 million sq ft.
CapitaLand Ascendas REIT (CLAR) has recently proposed to acquire DHL Indianapolis Logistics Center, 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 evaluation of the estate as at Jan 1, 2025.
The wholly occupied property, with its weighted average lease to expiry (WALE) of around 11 years, will certainly enhance CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
