CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
The completely occupied building, with its weighted average lease to expiry (WALE) of approximately 11 years, will certainly enhance CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.
The lengthy lease term of approximately 11 years with built-in rent rise of 3.5% per year will certainly offer revenue stability and reinforce the resilience of CLAR’s portfolio, claims the manager.
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.
CapitaLand Ascendas REIT (CLAR) has recently submitted to obtain DHL Indianapolis Logistics Facility, a Class A logistics building, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million. This is a 4.1% discount to the independent market evaluation of the estate as at Jan 1, 2025.
The manager plans to fund the overall acquisition charge through a blend of internal resources, divestment proceeds and/or existing debt centers, according to a Dec 17 announcement.
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 footprint in the US will expand to 20 properties throughout four cities with an overall GFA of roughly 5.1 million sq ft.
After adding transaction-related charges and expenses of $1.7 million, together with a $1.5 million procurement cost paid off to the supervisor, the total acquisition cost are going to be $153.4 million.
William Tay, executive head and CEO of the manager, mentions: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s primary sale and leaseback acquisition in the US and including this Class A logistics estate, contemporary logistics assets will certainly account for 42.3% of our United States logistics properties under management. With the long contract in position, this real estate is going to further enhance CLAR’s resistant earnings stream, and we expect the two brand-new properties to add efficiently to our extended returns.”
Following the procurement, DHL U.S.A. will participate in a continued leaseback till December 2035 of the real estate’s complete gross flooring area (GFA) with possibilities to extend for 2 additional five-year terms.
Besides this newest property in Indianapolis, CLAR’s logistics properties in the US rise in Kansas City, Chicago and Charleston.
The first-year net property income (NPI) revenue of the recommended acquisition is around 7.6% pre-transaction prices and 7.4% post-transaction expenses. The pro forma impact on the distribution per unit (DPU) for the financial year concluded Dec 31, 2023 is expected to be an improvement of roughly 0.019 Singapore cents, or a DPU accumulation of 0.1%, assuming the proposed acquisition was completed on Jan 1, 2023.
