CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The long lease term of around 11 years with integrated lease rise of 3.5% per year will offer revenue stability and strengthen the durability of CLAR’s selection, says the supervisor.
William Tay, executive director and CEO of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s first sale and leaseback acquisition in the America and including this Class A logistics property, modern logistics assets will certainly represent 42.3% of our United States logistics possessions under administration. With the lengthy contract in effect, this real estate will better improve CLAR’s durable income stream, and we expect the two new properties to add efficiently to our long-term returns.”
Besides this newest property in Indianapolis, CLAR’s logistics assets in the US are located in Kansas City, Chicago and Charleston.
Following the procurement, DHL United States will become part of a continued leaseback till December 2035 of the property’s entire gross floor area (GFA) with choices to renew for 2 additional five-year terms.
The first-year net property income (NPI) revenue of the suggested acquisition is around 7.6% pre-transaction expenses and 7.4% post-transaction expenses. The pro forma effect on the distribution per unit (DPU) for the financial year stopped Dec 31, 2023 is anticipated to be an improvement of roughly 0.019 Singapore cents, or a DPU rise of 0.1%, assuming the proposed acquisition was finished on Jan 1, 2023.
The manager means to fund the overall acquisition cost with a blend of internal sources, divestment proceeds and/or existing financial debt centers, according to a Dec 17 news release.
The fully taken up building, with its weighted average lease to expiry (WALE) of about 11 years, will enhance CLAR’s United States accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
CapitaLand Ascendas REIT (CLAR) has already submitted to obtain DHL Indianapolis Logistics Facility, a Class A logistics property, from Exel Inc. d/b/a DHL Supply Chain (DHL U.S.A.) for $150.3 million. This is a 4.1% discount to the independent market evaluation of the real estate as at Jan 1, 2025.
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 procurement will boost the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this procurement, CLAR’s logistics track in the America will expand to 20 properties throughout four cities with an overall GFA of roughly 5.1 million sq ft.
After adding transaction-related fees and expenses of $1.7 million, together with a $1.5 million acquisition cost settled to the manager, the total procurement expense are going to be $153.4 million.
