CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Following the procurement, DHL USA will become part of a long-term leaseback till December 2035 of the property’s overall gross floor area (GFA) with choices to renew for two extra five-year terms.
Completed in 2022, the estate lies in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is a completely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The long lease term of roughly 11 years with integrated rent rise of 3.5% per year will supply income stability and reinforce the durability of CLAR’s collection, claims the supervisor.
After including transaction-related fees and costs of $1.7 million, along with a $1.5 million acquisition fee paid off to the manager, the complete acquisition cost are going to be $153.4 million.
Aside from this newest property in Indianapolis, CLAR’s logistics properties in the US are located in Kansas City, Chicago and Charleston.
The procurement will certainly boost the worth of CLAR’s logistics assets under management (AUM) in the US by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics track in the US will definitely expand to 20 properties across four cities with a complete GFA of about 5.1 million sq ft.
William Tay, executive head and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s primary sale and leaseback procurement in the America and including this Class A logistics estate, contemporary logistics investments will account for 42.3% of our United States logistics properties under administration. With the extensive rent in effect, this real estate is going to better improve CLAR’s resistant earnings stream, and we expect both new real estates to contribute efficiently to our continued returns.”
The completely occupied property, with its weighted average lease to expiry (WALE) of roughly 11 years, will certainly enhance CLAR’s US profile WALE from 4.2 years to 4.7 years on a pro forma basis.
CapitaLand Ascendas REIT (CLAR) has proposed to get DHL Indianapolis Logistics Center, 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 assessment of the real estate as at Jan 1, 2025.
The first-year net property income (NPI) revenue of the suggested procurement is approximately 7.6% pre-transaction expenses and 7.4% post-transaction costs. The pro forma influence on the distribution per unit (DPU) for the financial year ended Dec 31, 2023 is expected to be an improvement of about 0.019 Singapore cents, or a DPU increase of 0.1%, thinking the proposed purchase was completed on Jan 1, 2023.
The manager plans to fund the total procurement cost via a blend of inside sources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 news release.
