CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Following the purchase, DHL U.S.A. will enter into a continued leaseback till December 2035 of the building’s entire gross flooring area (GFA) with choices to extend for 2 extra five-year terms.
The manager plans to fund the overall acquisition charge through a blend of inside sources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 news release.
CapitaLand Ascendas REIT (CLAR) has recently offered to get DHL Indianapolis Logistics Hub, a Class A logistics commercial 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 evaluation of the property as at Jan 1, 2025.
William Tay, executive director 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 procurement in the US and including this Class A logistics estate, contemporary logistics properties will represent 42.3% of our US logistics properties under administration. With the long lease in effect, this real estate will better boost CLAR’s resistant revenue stream, and we expect the two new properties to add positively to our extended returns.”
Kassia Condo Tripartite Developers Pte Ltd
The lengthy lease term of approximately 11 years with inbuilt rent acceleration of 3.5% per year will certainly provide income stability and enhance the durability of CLAR’s profile, says the supervisor.
The completely occupied building, with its weighted average lease to expiry (WALE) of approximately 11 years, will certainly raise CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
Completed in 2022, the property rises in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The first-year net property income (NPI) yield of the proposed purchase is approximately 7.6% pre-transaction prices and 7.4% post-transaction expenses. The pro forma influence on the distribution per unit (DPU) for the financial year ended Dec 31, 2023 is expected to be an improvement of around 0.019 Singapore cents, or a DPU accumulation of 0.1%, thinking the recommended procurement was completed on Jan 1, 2023.
Aside from this latest real estate in Indianapolis, CLAR’s logistics assets in the US are located in Kansas City, Chicago and Charleston.
The purchase will certainly increase the worth of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics presence in the America will definitely increase to 20 properties throughout four metros with a complete GFA of approximately 5.1 million sq ft.
After adding transaction-related costs and costs of $1.7 million, along with a $1.5 million procurement cost settled to the manager, the total procurement cost will most likely be $153.4 million.
