CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Following the purchase, DHL U.S.A. will become part of an extended leaseback till December 2035 of the real estate’s complete gross floor area (GFA) with choices to extend for 2 extra five-year terms.
The first-year net property income (NPI) return of the proposed purchase is approximately 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 concluded Dec 31, 2023 is expected to be an improvement of approximately 0.019 Singapore cents, or a DPU accretion of 0.1%, presuming the recommended purchase was completed on Jan 1, 2023.
Finished in 2022, the estate rises 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.
Apart from this newest real estate in Indianapolis, CLAR’s logistics properties in the United States are located in Kansas City, Chicago and Charleston.
CapitaLand Ascendas REIT (CLAR) has submitted to get DHL Indianapolis Logistics Hub, a Class A logistics property, from Exel Inc. d/b/a DHL Supply Chain (DHL U.S.A.) for $150.3 million. This is a 4.1% price cut to the independent market assessment of the estate as at Jan 1, 2025.
After including transaction-related charges and expenditures of $1.7 million, along with a $1.5 million acquisition fee paid off to the supervisor, the overall procurement cost will be $153.4 million.
William Tay, executive head and chief executive officer 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 procurement in the US and including this Class A logistics property, modern logistics investments will certainly represent 42.3% of our US logistics assets under control. With the lengthy rent in place, this real estate will further enhance CLAR’s resistant revenue stream, and we expect the two brand-new real estates to add positively to our long-term returns.”
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The completely taken up building, with its weighted average lease to expiry (WALE) of around 11 years, will enhance CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The long lease term of around 11 years with built-in rent rise of 3.5% per year will give earnings stability and enhance the resilience of CLAR’s portfolio, states the supervisor.
The procurement will certainly raise 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 US will expand to 20 properties throughout 4 metros with an overall GFA of around 5.1 million sq ft.
The manager plans to pay for the overall procurement fee via a combination of inner resources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 press release.
