CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
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 USA) for $150.3 million. This is a 4.1% discount rate to the independent market evaluation of the real estate as at Jan 1, 2025.
Completed in 2022, the 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 taken up property, with its weighted average lease to expiry (WALE) of about 11 years, will increase CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
After including transaction-related costs and expenses of $1.7 million, in addition to a $1.5 million procurement cost paid off to the supervisor, the complete procurement price are going to be $153.4 million.
William Tay, executive director and chief executive officer of the manager, mentions: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s first sale and leaseback purchase in the America and including this Class A logistics estate, modern logistics investments will account for 42.3% of our United States logistics assets under control. With the long contract in effect, this real estate will better enhance CLAR’s resistant earnings stream, and we anticipate the two brand-new real estates to add positively to our extended returns.”
The purchase will boost the worth of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics presence in the US will definitely expand to 20 properties throughout four metros with an overall GFA of roughly 5.1 million sq ft.
Following the procurement, DHL USA will enter into a long-term leaseback till December 2035 of the building’s overall gross flooring area (GFA) with choices to continue for 2 extra five-year terms.
The first-year net property income (NPI) return of the suggested acquisition is around 7.6% pre-transaction costs and 7.4% post-transaction costs. 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 roughly 0.019 Singapore cents, or a DPU accumulation of 0.1%, thinking the proposed procurement was completed on Jan 1, 2023.
Besides this latest real estate in Indianapolis, CLAR’s logistics properties in the United States are located in Kansas City, Chicago and Charleston.
The lengthy lease term of roughly 11 years with built-in rent acceleration of 3.5% per year will provide earnings security and enhance the resilience of CLAR’s profile, claims the supervisor.
The manager intends to finance the overall purchase cost via a blend of inside resources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 announcement.
