CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The manager intends to fund the total procurement cost through a blend of internal resources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 press release.
William Tay, executive head 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 acquisition in the America and including this Class A logistics estate, modern-day logistics assets will account for 42.3% of our US logistics possessions under management. With the lengthy rent in effect, this property is going to further enhance CLAR’s durable earnings stream, and we anticipate both brand-new real estates to add favorably to our continued returns.”
Following the acquisition, DHL USA will become part of a long-term leaseback till December 2035 of the building’s complete gross flooring area (GFA) with opportunities to continue for 2 extra five-year terms.
Aside from this most recent property in Indianapolis, CLAR’s logistics assets in the United States are located in Kansas City, Chicago and Charleston.
CapitaLand Ascendas REIT (CLAR) has recently proposed to get DHL Indianapolis Logistics Center, a Class A logistics commercial property, 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.
The procurement will certainly 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 America will definitely increase to 20 properties across 4 cities with a complete GFA of approximately 5.1 million sq ft.
The first-year net property income (NPI) return of the recommended purchase is around 7.6% pre-transaction expenses 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 approximately 0.019 Singapore cents, or a DPU accumulation of 0.1%, thinking the suggested acquisition was finished on Jan 1, 2023.
Finished in 2022, the property stands 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 including transaction-related costs and costs of $1.7 million, together with a $1.5 million procurement charge paid to the manager, the complete acquisition price are going to be $153.4 million.
The fully taken up property, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly raise CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The lengthy lease term of about 11 years with built-in rental fee acceleration of 3.5% per year will give income stability and reinforce the resilience of CLAR’s profile, claims the manager.
