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 building’s whole gross floor area (GFA) with possibilities to renew for 2 extra five-year terms.
William Tay, executive head and chief executive officer of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s very first sale and leaseback acquisition in the America and including this Class A logistics property, modern logistics investments will certainly account for 42.3% of our United States logistics properties under administration. With the long lease in place, this property is going to better enhance CLAR’s resistant revenue stream, and we expect the two brand-new properties to contribute favorably to our long-term returns.”
The manager plans to finance the complete procurement charge via a mix of internal resources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 news release.
The completely occupied building, with its weighted average lease to expiry (WALE) of about 11 years, will certainly boost CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The first-year net property income (NPI) yield of the proposed procurement is roughly 7.6% pre-transaction costs and 7.4% post-transaction prices. The pro forma effect 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 accretion of 0.1%, assuming the suggested purchase was finished on Jan 1, 2023.
The long lease term of approximately 11 years with built-in lease acceleration of 3.5% per year will certainly provide income stability and enhance the durability of CLAR’s selection, says the manager.
Apart from this latest real estate in Indianapolis, CLAR’s logistics properties in the US rise in Kansas City, Chicago and Charleston.
Finished in 2022, the commercial property is located in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
After adding transaction-related fees and expenditures of $1.7 million, along with a $1.5 million procurement fee paid to the manager, the overall purchase cost will most likely be $153.4 million.
CapitaLand Ascendas REIT (CLAR) has already offered to get DHL Indianapolis Logistics Center, a Class A logistics real estate, 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 evaluation of the property as at Jan 1, 2025.
The purchase 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 footprint in the USA will broaden to 20 properties throughout 4 cities with an overall GFA of roughly 5.1 million sq ft.
