CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Following the procurement, DHL United States will participate in a continued leaseback till December 2035 of the building’s overall gross floor surface area (GFA) with possibilities to extend for two additional five-year terms.
The first-year net property income (NPI) return of the suggested procurement is around 7.6% pre-transaction prices and 7.4% post-transaction prices. The pro forma effect on the distribution per unit (DPU) for the financial year finished Dec 31, 2023 is expected to be an improvement of around 0.019 Singapore cents, or a DPU accretion of 0.1%, thinking the proposed purchase was finished on Jan 1, 2023.
William Tay, executive director and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s very first sale and leaseback purchase in the America and including this Class A logistics property, modern logistics assets will represent 42.3% of our US logistics possessions under control. With the lengthy contract in effect, this real estate is going to better boost CLAR’s resistant earnings stream, and we anticipate both brand-new real estates to contribute positively to our long-term returns.”
Completed in 2022, the property stands in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is an entirely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
After including transaction-related fees and expenses of $1.7 million, in addition to a $1.5 million acquisition cost paid off to the manager, the overall purchase cost are going to be $153.4 million.
The lengthy lease term of around 11 years with inbuilt rent acceleration of 3.5% per annum will provide earnings stability and enhance the durability of CLAR’s portfolio, states the supervisor.
The wholly occupied property, with its weighted average lease to expiry (WALE) of approximately 11 years, will boost CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
The manager means to fund the total purchase charge via a combination of internal resources, divestment proceeds and/or existing debt centers, according to a Dec 17 announcement.
The acquisition will enhance the value of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this purchase, CLAR’s logistics footprint in the America will definitely broaden to 20 properties throughout 4 towns with a total GFA of roughly 5.1 million sq ft.
CapitaLand Ascendas REIT (CLAR) has already submitted to acquire DHL Indianapolis Logistics Hub, a Class A logistics real estate, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million. This is a 4.1% discount rate to the independent market valuation of the estate as at Jan 1, 2025.
Apart from this newest property in Indianapolis, CLAR’s logistics assets in the United States are located in Kansas City, Chicago and Charleston.
