.Since the article covers the proposal of CapitaLand Ascendas REIT (CLAR) acquiring DHL Indianapolis Logistics Center from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million, it could be rewritten in the following way:CapitaLand Ascendas REIT (CLAR) has announced its plans to purchase DHL Indianapolis Logistics Center, a prominent Class A logistics property, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) at a cost of $150.3 million. This price stands at a 4.1% discount to the independent market valuation of the property as of Jan 1, 2025. Once the transaction-related fees and expenses of $1.7 million and the $1.5 million acquisition fee paid to the manager are added, the total cost of the acquisition will amount to $153.4 million.
According to a press release issued on Dec 17, the manager aims to finance the entire acquisition cost through internal resources, divestment proceeds, and existing debt facilities. This move is expected to strengthen CLAR’s portfolio once the acquisition is finalized.
The long-term plan is for DHL USA to enter into a leaseback agreement till December 2035, encompassing the entire gross floor area (GFA) of the property, with options to extend for two additional five-year periods. This will provide income stability for CLAR’s portfolio, with the lease term lasting approximately 11 years and annual rent escalation of 3.5%.
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As of now, the property is fully occupied and boasts a weighted average lease to expiry (WALE) of about 11 years. Its inclusion in CLAR’s portfolio will increase the US portfolio’s WALE from 4.2 years to 4.7 years on a pro forma basis. The first-year net property income (NPI) yield of the proposed acquisition is approximately 7.6% before transaction costs and 7.4% after transaction costs. The impact on the distribution per unit (DPU) for the financial year ending Dec 31, 2023, is expected to be an enhancement of roughly 0.019 Singapore cents or a DPU increment of 0.1%, assuming the acquisition is completed on Jan 1, 2023.
Located in Whiteland, a submarket in southeast Indianapolis, Indiana, the property was completed in 2022. Covering a vast area of 979,649 square feet, the property is a fully air-conditioned, single-story logistics building. Its addition to CLAR’s portfolio will increase the value of the US logistics assets under management (AUM) by 35.3% to an estimated $587.5 million. With this acquisition, CLAR’s logistics footprint in the US will expand to 20 properties spread across four cities, encompassing a total GFA of approximately 5.1 million square feet.
Besides the latest property in Indianapolis, CLAR also has logistics assets in Kansas City, Chicago, and Charleston in the US. According to the executive director and CEO of the manager, William Tay, “DHL Indianapolis Logistics Center is a perfect fit for our existing portfolio. This is CLAR’s first sale and leaseback acquisition in the US, and including this Class A logistics property, modern logistics assets will make up 42.3% of our US logistics assets under management. With the long lease in place, this property will further enhance CLAR’s resilient income stream, and we expect the two new properties to contribute positively to our long-term returns.”