CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
CapitaLand Ascendas REIT (CLAR) has offered to acquire DHL Indianapolis Logistics Hub, a Class A logistics real estate, from Exel Inc. d/b/a DHL Supply Chain (DHL U.S.A.) for $150.3 million. This is a 4.1% discount rate to the independent market assessment of the real estate as at Jan 1, 2025.
The wholly occupied building, with its weighted average lease to expiry (WALE) of around 11 years, will certainly increase CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
Following the acquisition, DHL United States will participate in a long-term leaseback till December 2035 of the real estate’s overall gross floor surface area (GFA) with options to extend for two extra five-year terms.
The manager plans to fund the complete acquisition fee via a mix of inner resources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 announcement.
The long lease term of approximately 11 years with built-in rental fee escalation of 3.5% per year will offer revenue stability and reinforce the resilience of CLAR’s portfolio, states the supervisor.
William Tay, executive director and chief executive officer of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio … This is CLAR’s primary sale and leaseback acquisition in the US and including this Class A logistics property, modern-day logistics investments will represent 42.3% of our US logistics properties under administration. With the long rent in position, this property is going to better boost CLAR’s resistant revenue stream, and we expect the two new real estates to contribute efficiently to our long-term returns.”
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The acquisition will certainly enhance the value 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 presence in the US will definitely increase to 20 properties throughout four towns with a total GFA of around 5.1 million sq ft.
The first-year net property income (NPI) revenue of the recommended procurement is roughly 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 concluded Dec 31, 2023 is expected to be an improvement of about 0.019 Singapore cents, or a DPU accretion of 0.1%, presuming the proposed procurement was finished on Jan 1, 2023.
Aside from this latest real estate in Indianapolis, CLAR’s logistics assets in the US rise in Kansas City, Chicago and Charleston.
Completed in 2022, the estate is located 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.
After including transaction-related costs and expenditures of $1.7 million, together with a $1.5 million procurement charge paid off to the manager, the complete procurement price will most likely be $153.4 million.
