CLAR proposes to acquire DHL Indianapolis Logistics Centre for $150.3 mil; announces divestment of Jalan Buroh property
CapitaLand Ascendas REIT (CLAR) has recently announced its intention to acquire DHL Indianapolis Logistics Center, a top-quality logistics property in the USA, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million. This proposed acquisition is a strategic move that will not only strengthen CLAR’s portfolio but also boost its income stability and resilience. The property, which was independently valued at $156.7 million as at Jan 1, 2025, will be acquired at a 4.1% discount. The total acquisition cost, including fees and expenses, will be $153.4 million.
To fund this acquisition, the manager of CLAR intends to use a combination of internal resources, divestment proceeds, and/or existing debt facilities. The transaction is expected to be completed in 2022, and upon completion, DHL USA will enter into a long-term leaseback agreement for the entire property until December 2035, with options to renew for two additional five-year terms. This long lease term, combined with a built-in annual rent escalation of 3.5%, will provide a stable income stream for CLAR and improve the resilience of its portfolio.
The DHL Indianapolis Logistics Center is a fully occupied, single-storey logistics building with a gross floor area of 979,649 sq ft. It is located in Whiteland, a submarket in southeast Indianapolis, Indiana. This prime property is expected to increase the value of CLAR’s logistics assets under management (AUM) in the USA by 35.3% to approximately $587.5 million. With this acquisition, CLAR’s logistics footprint in the USA will expand to 20 properties, covering four cities and a total GFA of approximately 5.1 million sq ft.
William Tay, executive director and CEO of the manager, believes that this acquisition is a strategic fit for CLAR’s existing portfolio. He also states that this is CLAR’s first sale and leaseback acquisition in the USA, and it will increase the proportion of modern logistics assets in its portfolio to 42.3%. This property will further enhance CLAR’s resilient income stream and is expected to contribute positively to its long-term returns.
In addition to this latest acquisition in Indianapolis, CLAR’s logistics assets in the USA are situated in Kansas City, Chicago, and Charleston. The manager is confident that this acquisition, along with the divestment of the Jalan Buroh property, will further strengthen CLAR’s position as a leading logistics real estate investment trust in the region. The proposed acquisition is estimated to have a pro forma impact of approximately 0.019 Singapore cents on the distribution per unit (DPU) for the financial year ended Dec 31, 2023, representing a DPU accretion of 0.1%, assuming the acquisition was completed on Jan 1, 2023.
.
The cityscape of Singapore is distinguishable by its towering skyscrapers and state-of-the-art facilities. These modern condos, strategically situated in desirable locations, offer a combination of opulence and convenience that appeals to both locals and foreigners. With a plethora of facilities like swimming pools, fitness centers, and top-notch security services, these condos provide a comfortable and enticing lifestyle for potential tenants and buyers. Additionally, investors can reap the benefits of higher rental returns and an increase in property value over time. Keep up-to-date with the latest developments by checking out New Condo Launches.