CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The first-year net property income (NPI) revenue of the proposed acquisition is around 7.6% pre-transaction costs and 7.4% post-transaction prices. The pro forma influence on the distribution per unit (DPU) for the financial year concluded Dec 31, 2023 is expected to be an improvement of around 0.019 Singapore cents, or a DPU increase of 0.1%, presuming the recommended purchase was completed on Jan 1, 2023.
The purchase 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 footprint in the US will definitely expand to 20 properties across 4 cities with a total GFA of about 5.1 million sq ft.
Completed in 2022, the property rises in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is an entirely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The wholly occupied property, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly raise CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
Apart from this latest real estate in Indianapolis, CLAR’s logistics properties in the US are located in Kansas City, Chicago and Charleston.
William Tay, executive director and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s primary sale and leaseback procurement in the America and including this Class A logistics estate, modern logistics properties will certainly make up 42.3% of our US logistics possessions under administration. With the lengthy lease in position, this property will further enhance CLAR’s resistant earnings stream, and we expect the two brand-new properties to contribute positively to our extended returns.”
The manager plans to fund the total acquisition charge through a combination of inside resources, divestment proceeds and/or existing debt facilities, according to a Dec 17 announcement.
After including transaction-related costs and expenditures of $1.7 million, in addition to a $1.5 million acquisition charge settled to the manager, the complete acquisition expense are going to be $153.4 million.
Following the purchase, DHL United States will enter into a continued leaseback till December 2035 of the building’s overall gross floor area (GFA) with possibilities to renew for 2 extra five-year terms.
The lengthy lease term of around 11 years with integrated rental fee rise of 3.5% per annum will offer revenue security and enhance the durability of CLAR’s collection, states the manager.
CapitaLand Ascendas REIT (CLAR) has submitted to get DHL Indianapolis Logistics Hub, a Class A logistics building, from Exel Inc. d/b/a DHL Supply Chain (DHL United States) for $150.3 million. This is a 4.1% discount rate to the independent market assessment of the real estate as at Jan 1, 2025.
