Capitaland Ascendas Reit Proposes Acquire Three Industrial And Logistics Properties Singapore 5658
CapitaLand Ascendas REIT acquires remaining stake in Galaxis for $534.4 mil
CapitaLand Ascendas REIT (CLAR) has announced its proposal to acquire three properties in Singapore at the estimated consideration of $565.8 million, which includes upfront land and enhancement premiums of $33.2 million. The independently valued portfolio is estimated to be worth $589 million.
The three properties are a four-storey ramp-up logistics property at 2 Pioneer Sector 1, Tuas Connection (a light industrial property comprising 15 double-storey industrial units on Tuas Loop), and an eight-storey high-specifications industrial property at 9 Kallang Sector. These acquisitions would increase the value of CLAR’s Singapore portfolio to approximately $12.3 billion. Singapore assets would account for 68% of the total assets under management (AUM) upon completion of the acquisition around 1Q2026.
The target properties are fully occupied by 19 tenants, including publicly listed companies and multinational corporations in industries like electronics and semiconductors, transportation and logistics, precision engineering, pharmaceuticals, and life sciences. The weighted average lease expiry (WALE) for these tenants is approximately 5.5 years, signifying a stable income stream. CLAR expects rental growth opportunities with rental escalations ranging from 1% to 5% per annum in most of the leases. In-place rents are also 15% below market rents, according to the REIT manager’s Oct 7 announcement.
The proposed acquisitions are expected to positively impact CLAR’s distribution per unit (DPU). The first-year net property yield is estimated to be around 6.4% pre-transaction costs and 6.1% post-transaction costs. If completed on Jan 1, 2024, the DPU is expected to improve by approximately 0.124 cents or 0.8% for the FY2024 ended Dec 31, 2024, on a pro forma basis.
In line with the acquisitions, CLAR’s trustee has entered into conditional put and call option agreements with DBS Trustee Limited for 2 Pioneer Sector 1 and Tuas Connection. DBS Trustee is the trustee of Supreme REIT. CLAR’s trustee has also entered into a share sale agreement with Supreme REIT and Clay SG Holdings I Pte. Ltd to acquire 100% of the issued share capital of Waterbay Investment Pte. Ltd., the registered proprietor of the property located at 9 Kallang Sector.
William Tay, executive director and CEO of CLAR’s manager, says, “These accretive acquisitions build on our recent acquisitions of a Tier III colocation data centre and a premium business space property which were completed in August.” He also adds that the properties’ attractive lease profile is a rare opportunity in Singapore’s industrial property market and will enhance the resilience of CLAR’s income stream.
This story first appeared on . RELATED NEWS
CLAR has expanded its logistics portfolio in the UK for $350.1 million. The REIT also announced its acquisition of properties in Tai Seng and Science Park Drive for $700 million. In its continued expansion, CLAR has acquired its first sale and leaseback in the US for $150.3 million. Recently, the REIT also acquired the remaining stake in Galaxis for $534.4 million.
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