CapitaLand Ascendas REIT (CLAR) has announced its plans to acquire DHL Indianapolis Logistics Center, a top-notch logistics property, from Exel Inc. d/b/a DHL Supply Chain (DHL USA) for $150.3 million. This purchase presents a 4.1% discount to the market valuation of the property as of January 1, 2025.Completing the acquisition with an additional $1.7 million in transaction-related fees and expenses, along with a $1.5 million acquisition fee paid to the manager, the total cost for the property will be $153.4 million. The manager is planning to fund the acquisition through internal resources, proceeds from divestments, and/or existing debt facilities, according to a press release on December 17.Read also: CLAR plans to divest Jalan Buroh property at significant premium to cost and valuationAdvertisementAdvertisementFollowing the purchase, DHL USA will enter into a long-term leaseback agreement until December 2035 for the entire gross floor area (GFA) of the property, with options to renew for two additional five-year terms. The manager states that the long 11-year lease term, coupled with a built-in rent escalation of 3.5% per annum, will provide income stability and strengthen CLAR’s portfolio. The property is fully occupied and has a weighted average lease to expiry (WALE) of around 11 years, which will increase CLAR’s US portfolio WALE from 4.2 years to 4.7 years on a pro forma basis.AdvertisementThe first-year net property income (NPI) yield of the planned acquisition is approximately 7.6% before the transaction costs and 7.4% post-transaction costs. The manager expects an improvement of about 0.019 Singapore cents on the distribution per unit (DPU) for the financial year ending December 31, 2023, or a DPU accretion of 0.1%, assuming the purchase is completed on January 1, 2023.The property is expected to be completed in 2022 and is situated in Whiteland, a submarket in southeast Indianapolis, Indiana. The property is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft. With this acquisition, the value of CLAR’s logistics assets under management (AUM) in the US will increase by 35.3% to approximately $587.5 million. Additionally, this purchase will expand CLAR’s logistics presence in the US to include 20 properties across four cities, encompassing a total GFA of approximately 5.1 million sq ft.Read also: CapitaLand Ascendas REIT to divest three Australian logistics properties for $64.2 milAdvertisementIn addition to the recent acquisition in Indianapolis, CLAR also has logistics assets in Kansas City, Chicago, and Charleston in the US. William Tay, executive director and CEO of the manager, stated that “DHL Indianapolis Logistics Center is a strategic fit with our existing portfolio… This is CLAR’s first sale and leaseback acquisition in the US, and including this top-quality logistics property, modern logistics assets will account for 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.”RELATED NEWSCapitaLand Ascendas REIT to divest three Australian logistics properties for $64.2 milCapitaLand Ascendas REIT to acquire Seagate’s The Shugart in one-north for $218.2 milCapitaLand Ascendas REIT divests local industrial building at 219% premium from 2005 purchase price
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