CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
CapitaLand Ascendas REIT (CLAR) has submitted 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% price cut to the independent market evaluation of the real estate as at Jan 1, 2025.
Finished in 2022, the property stands in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is a completely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
Following the acquisition, DHL USA will become part of a continued leaseback till December 2035 of the real estate’s complete gross floor area (GFA) with options to renew for two extra five-year terms.
William Tay, executive director and chief executive officer of the manager, mentions: “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 estate, contemporary logistics properties will account for 42.3% of our United States logistics assets under management. With the long rent in position, this real estate is going to further enhance CLAR’s durable earnings stream, and we expect both brand-new properties to contribute favorably to our extended returns.”
The manager means to fund the total purchase cost via a blend of internal sources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 news release.
After including transaction-related charges and expenditures of $1.7 million, together with a $1.5 million procurement cost paid off to the supervisor, the overall purchase cost are going to be $153.4 million.
The wholly taken up building, with its weighted average lease to expiry (WALE) of roughly 11 years, will enhance CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
The lengthy lease term of roughly 11 years with built-in lease escalation of 3.5% per annum will certainly provide income security and enhance the durability of CLAR’s profile, claims the supervisor.
Aside from this latest real estate in Indianapolis, CLAR’s logistics assets in the United States are located in Kansas City, Chicago and Charleston.
The first-year net property income (NPI) revenue of the recommended purchase is about 7.6% pre-transaction costs and 7.4% post-transaction expenses. The pro forma influence on the distribution per unit (DPU) for the financial year stopped Dec 31, 2023 is expected to be an improvement of about 0.019 Singapore cents, or a DPU accumulation of 0.1%, assuming the recommended purchase was finished on Jan 1, 2023.
The procurement will raise the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics track in the USA will definitely expand to 20 properties throughout 4 metros with a total GFA of about 5.1 million sq ft.
