CAPITALAND Ascendas Reit (Clar) is proposing to acquire logistics property DHL Indianapolis Logistics Center in Whiteland, Indianapolis, Indiana, for S$150.3 million from DHL USA.
The completion of the deal is slated for the first quarter of 2025.
Following this, DHL USA will enter a long-term leaseback of about 11 years till December 2035 of the property’s entire gross floor area (GFA) of about 979,649 square feet (sq ft).
The agreement will also come with options to renew for two additional five-year terms.
On Tuesday (Dec 17), Clar’s manager said that this will represent the real estate investment trust’s (Reit) first sale-and-leaseback acquisition in the United States.
Its executive director and chief executive William Tay added that the acquisition would increase Clar’s US logistics portfolio value by 35.3 per cent to S$587.5 million, with a total estimated GFA of 5.1 million sq ft.
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Including DHL Indianapolis Logistics Center, modern logistics assets will account for 42.3 per cent of the Reit’s US logistics assets under management.
Clar’s manager expects DHL Indianapolis Logistics Center’s built-in rent escalation of 3.5 per cent per annum to provide income stability and strengthen the resilience of the Reit’s portfolio.
“With the long lease in place, this property will further enhance Clar’s resilient income stream,” said Tay.
The fully occupied property is a single-storey, fully air-conditioned logistics building with specifications such as a high ceiling with a clear height of 12.2 metres.
The property’s modern features, including cross-dock configuration and LED lighting, are expected to enable it to meet and accommodate the needs of both current and future occupiers, noted Clar’s manager.
Highlighting the locations of Clar’s other US logistics assets in Kansas City, Chicago and Charleston, the manager believes that DHL Indianapolis Logistics Center is “a strategic fit” with such existing assets.
It also strengthens Clar’s presence in the Midwest, which the manager identified as one of the major industrial markets in the US.
The property’s total acquisition cost of S$153.4 million, including an acquisition fee and other transaction-related expenses, is intended to be financed through a combination of internal resources, divestment proceeds or existing debt facilities.
For illustrative purposes, Clar’s distribution per unit (DPU) for the financial year would have been S$0.00019, representing a DPU accretion of 0.1 per cent, assuming that the proposed acquisition was completed on Jan 1, 2023.
Units of Clar closed flat on Monday at S$2.55.
