Clar Expands Us Logistics Portfolio First Sale And Leaseback Acquisition 1503 Million

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SINGAPORE (July 23): CapitaLand Ascendas REIT (CLAR) has announced its plans to acquire DHL Indianapolis Logistics Center for $150.3 million. The property is a Class A logistics property that will be purchased from Exel Inc. d/b/a DHL Supply Chain (DHL USA). The acquisition is set to be completed on Jan 1, 2025, and will result in a discount of 4.1% based on the independent market valuation as at this date. The total cost of the acquisition will amount to $153.4 million, which includes transaction-related fees and expenses of $1.7 million, as well as a $1.5 million acquisition fee paid to the manager. To finance this acquisition, the manager intends to use internal resources, divestment proceeds, and/or existing debt facilities. The acquisition will be completed through a long-term leaseback agreement with DHL USA, which will last until December 2035. There will also be options to renew for two additional five-year terms. This long lease term of approximately 11 years, along with a rent escalation of 3.5% per annum, will bring income stability and strengthen the resilience of CLAR’s portfolio. The property is fully occupied and has a weighted average lease to expiry (WALE) of approximately 11 years, which will increase CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis. The first-year net property income (NPI) yield of the proposed acquisition is expected to be approximately 7.6% before transaction costs, and 7.4% after transaction costs. The pro forma impact on the distribution per unit (DPU) for the financial year ended Dec 31, 2023, is expected to improve by approximately 0.019 Singapore cents, or a DPU accretion of 0.1%. If the acquisition had been completed on Jan 1, 2023, the total amount of the DPU would have been even higher. The property, which was completed in 2022, is situated in Whiteland, a submarket in southeast Indianapolis, Indiana. It is a fully air-conditioned, single-storey logistics building with a gross floor area (GFA) of 979,649 square feet. This acquisition will raise the value of CLAR’s logistics assets under management (AUM) in the US by 35.3%, bringing it to approximately $587.5 million. Additionally, CLAR’s logistics footprint in the US will expand to 20 properties across four cities, with a total GFA of approximately 5.1 million square feet. CLAR’s logistics assets in the US are located in Kansas City, Chicago, Charleston, and now Indianapolis. William Tay, executive director, and CEO of the manager says, “DHL Indianapolis Logistics Center is a strategic addition to our existing portfolio. This is CLAR’s first sale and leaseback acquisition in the US, and including this Class A logistics property, modern logistics assets will account for 42.3% of our US logistics assets under management. With the long lease in place, this property will further enhance CLAR’s resilient income stream, and we expect the two new properties to positively contribute to our long-term returns.”