CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The lengthy lease term of about 11 years with built-in rent escalation of 3.5% per annum will certainly provide earnings stability and strengthen the durability of CLAR’s profile, claims the supervisor.
William Tay, executive director and chief executive officer of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s very first sale and leaseback procurement in the America and including this Class A logistics property, modern-day logistics investments will certainly represent 42.3% of our United States logistics assets under management. With the lengthy rent in position, this real estate will better improve CLAR’s resilient earnings stream, and we anticipate both new properties to contribute positively to our long-term returns.”
Completed in 2022, the estate 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 including transaction-related charges and expenditures of $1.7 million, in addition to a $1.5 million acquisition charge paid off to the manager, the overall purchase cost are going to be $153.4 million.
The manager means to fund the complete procurement cost with a combination of inside resources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 press release.
Apart from this newest property in Indianapolis, CLAR’s logistics assets in the United States rise in Kansas City, Chicago and Charleston.
The first-year net property income (NPI) revenue of the suggested acquisition is about 7.6% pre-transaction prices 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 anticipated to be an improvement of about 0.019 Singapore cents, or a DPU increase of 0.1%, thinking the recommended purchase was finished on Jan 1, 2023.
Following the purchase, DHL USA will become part of a long-term leaseback till December 2035 of the building’s overall gross floor area (GFA) with possibilities to continue for two additional five-year terms.
The fully occupied building, with its weighted average lease to expiry (WALE) of approximately 11 years, will certainly boost CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The purchase will enhance the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this procurement, CLAR’s logistics presence in the USA will broaden to 20 properties throughout 4 metros with a total GFA of about 5.1 million sq ft.
CapitaLand Ascendas REIT (CLAR) has already submitted to get DHL Indianapolis Logistics Facility, a Class A logistics 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 valuation of the real estate as at Jan 1, 2025.
