SINGAPORE (Feb 11): CapitaLand Ascendas REIT (CLAR) has announced its plans to acquire a Class A logistics property, the DHL Indianapolis Logistics Center, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for a total of $150.3 million. The acquisition will be 4.1% below the independent market valuation of the property as of Jan 1, 2025. The total cost of acquisition, including transaction fees, expenses and an acquisition fee of $1.5 million paid to the manager, will amount to $153.4 million. The manager intends to use a combination of internal resources, divestment proceeds and/or existing debt facilities to finance the acquisition, as stated in a press release on Dec 17. Following the acquisition, DHL USA will enter into a long-term leaseback arrangement for the entire gross floor area (GFA) of the property until December 2035, with options to renew for an additional two five-year terms. This 11-year lease term, with an annual rent escalation of 3.5%, is expected to provide a stable source of income for CLAR and bolster the resilience of its portfolio. The fully occupied property has a weighted average lease to expiry (WALE) of approximately 11 years, which will raise CLAR’s portfolio WALE from 4.2 to 4.7 years pro forma. The first-year net property income (NPI) yield of this proposed acquisition is approximately 7.6% pre-transaction fees and 7.4% post-transaction fees. This is expected to improve the distribution per unit (DPU) for the financial year ended Dec 31, 2023 by 0.019 Singapore cents, or a DPU accretion of 0.1%, assuming the acquisition is completed on Jan 1, 2023. The property, completed in 2022, is situated in Whiteland, a submarket in southeast Indianapolis, Indiana. It is a fully air-conditioned and single-storey logistics building that has a GFA of 979,649 sq ft. The acquisition will boost the value of CLAR’s logistics assets under management (AUM) in the US by 35.3%, bringing it to around $587.5 million. The addition of this property will also expand CLAR’s logistics portfolio in the US to 20 properties across four cities, with a total GFA of approximately 5.1 million sq ft. With this latest acquisition, CLAR’s logistics assets in the US will be located in Kansas City, Chicago, Charleston and Indianapolis. William Tay, the executive director and CEO of the manager, says that the DHL Indianapolis Logistics Center is a perfect addition to CLAR’s existing portfolio. This marks CLAR’s first sale and leaseback acquisition in the US and bolsters its share of modern logistics assets to 42.3% of its US logistics AUM. Tay adds that with the long lease in place, this property will diversify CLAR’s income streams and contribute positively to its long-term returns.
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