Clar Plans Divest Buroh Property Significant Premium Cost And Valuation

CapitaLand Ascendas REIT’s (CLAR) manager has recently announced the decision to sell 21 Jalan Buroh, a property located in Singapore, for $112.8 million. This three-storey ramp-up warehouse and seven-storey ancillary office block was acquired by CLAR in 2006 at a price of $58.4 million.

The proposed selling price is significantly higher than the original purchase price and the average of two market valuations done in July 1, which was at $67.5 million. The estimated sale proceeds are expected to be around $102.9 million.

Despite the divestment, it is predicted that CLAR’s net asset value (NAV) and distribution per unit (DPU) for FY2024 will remain unaffected. However, on a pro forma basis, there will be a decrease of $4.6 million in net property income (NPI) and a decline of 0.085 cents in DPU. The pro forma aggregate leverage is also expected to decrease from 37.9% to 37.4%. As a reference, CLAR’s NPI and DPU for FY2024 were $1.032 billion and 15.16 cents respectively.

The sale is estimated to be completed in the last quarter of 2024. After the transaction, CLAR will still own a portfolio of 228 properties worldwide, including 96 properties in Singapore, 34 in Australia, 48 in the United States, and 50 in the United Kingdom/Europe.

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