CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Finished in 2022, the property rises in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The manager means to finance the complete acquisition cost through a mix of inside sources, divestment proceeds and/or existing financial debt facilities, according to a Dec 17 press release.
The wholly taken up property, with its weighted average lease to expiry (WALE) of approximately 11 years, will certainly increase CLAR’s United States profile WALE from 4.2 years to 4.7 years on a pro forma basis.
The purchase will boost the value of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this purchase, CLAR’s logistics footprint in the America will definitely broaden to 20 properties across four cities with a complete GFA of about 5.1 million sq ft.
After including transaction-related fees and expenses of $1.7 million, together with a $1.5 million acquisition cost settled to the supervisor, the complete acquisition cost are going to be $153.4 million.
William Tay, executive head and chief executive officer of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s first sale and leaseback purchase in the America and including this Class A logistics estate, contemporary logistics investments will make up 42.3% of our United States logistics possessions under administration. With the long rent in place, this real estate will better boost CLAR’s durable revenue stream, and we expect the two brand-new properties to contribute positively to our continued returns.”
Following the procurement, DHL United States will enter into a continued leaseback till December 2035 of the real estate’s complete gross flooring area (GFA) with possibilities to renew for two additional five-year terms.
The first-year net property income (NPI) yield of the proposed purchase is about 7.6% pre-transaction expenses and 7.4% post-transaction expenses. 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 around 0.019 Singapore cents, or a DPU accumulation of 0.1%, thinking the recommended procurement was finished on Jan 1, 2023.
The long lease term of around 11 years with built-in rental fee escalation of 3.5% per annum will certainly offer revenue security and enhance the durability of CLAR’s selection, says the supervisor.
Besides this newest property in Indianapolis, CLAR’s logistics possessions in the US are located in Kansas City, Chicago and Charleston.
CapitaLand Ascendas REIT (CLAR) has already offered to acquire 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 valuation of the property as at Jan 1, 2025.
