CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Completed in 2022, the commercial property is located in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is an entirely air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
Following the procurement, DHL USA will participate in an extended leaseback till December 2035 of the building’s whole gross floor surface area (GFA) with possibilities to continue for 2 additional five-year terms.
Apart from this most recent real estate in Indianapolis, CLAR’s logistics properties in the United States rise in Kansas City, Chicago and Charleston.
After adding transaction-related costs and costs of $1.7 million, along with a $1.5 million procurement cost paid to the manager, the total procurement expense will be $153.4 million.
William Tay, executive head and chief executive officer of the manager, states: “DHL Indianapolis Logistics Center is a strategic fit with our existing account … This is CLAR’s first sale and leaseback purchase in the US and including this Class A logistics estate, modern-day logistics investments will certainly represent 42.3% of our US logistics possessions under administration. With the extensive contract in position, this property is going to better enhance CLAR’s durable earnings stream, and we anticipate the two brand-new properties to add positively to our continued returns.”
Blossoms By The Park floor plan
The lengthy lease term of around 11 years with built-in rent acceleration of 3.5% per year will offer income security and strengthen the durability of CLAR’s profile, says the supervisor.
The fully taken up property, with its weighted average lease to expiry (WALE) of about 11 years, will certainly increase CLAR’s United States profile WALE from 4.2 years to 4.7 years on a pro forma basis.
CapitaLand Ascendas REIT (CLAR) has already submitted to obtain DHL Indianapolis Logistics Center, 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.
The purchase will certainly enhance the value of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this procurement, CLAR’s logistics track in the USA will definitely expand to 20 properties throughout four towns with an overall GFA of around 5.1 million sq ft.
The first-year net property income (NPI) return of the suggested acquisition is around 7.6% pre-transaction prices and 7.4% post-transaction costs. The pro forma effect on the distribution per unit (DPU) for the financial year stopped Dec 31, 2023 is expected to be an improvement of around 0.019 Singapore cents, or a DPU accumulation of 0.1%, presuming the suggested acquisition was completed on Jan 1, 2023.
The manager intends to finance the total purchase charge through a blend of internal sources, divestment proceeds and/or existing debt facilities, according to a Dec 17 press release.
