CapitaLand Ascendas REIT proposes to acquire three industrial and logistics properties in Singapore for $565.8 mil
CapitaLand Ascendas REIT (CLAR) is suggesting to obtain three properties in Singapore for an absolute consideration of $565.8 million, that includes the estimated upfront land and enhancement premiums of $33.2 million. The aggregate market value of the portfolio is individually valued at approximately $589 million.
He includes that the buildings’ “strong lease account” is a “unusual and appealing possibility” in Singapore’s industrial property market and will “enhance the resilience of CLAR’s profit flow.”
” These accretive purchases build on our recent purchases of a Tier III colocation data centre and a premium business place real estate that were completed in August,” states William Tay, executive director and chief executive officer of CLAR’s manager.
In accordance with the purchases, CLAR’s trustee has participated in conditional put and call option agreements with DBS Trustee Limited for 2 Pioneer Sector 1 and Tuas Connection. DBS Trustee is the trustee of Supreme REIT.
The suggested procurement is anticipated to be accretive to CLAR’s distribution per unit (DPU). The anticipated first year net real estate yield is near 6.4% pre-transaction costs and 6.1% post-transaction prices.
CLAR’s trustee has actually likewise participated in a share sale agreement with Supreme REIT and Clay SG Holdings I Pte. Ltd to get 100% of the released share capital of Waterbay Investment Pte. Ltd., the recorded proprietor of the property located at 9 Kallang Sector.
The ideal properties are totally occupied by 19 tenants with a long weighted average lease expiry (WALE) of around 5.5 years. These lessees are publicly listed companies and global firms in markets like electronic devices & semiconductors, transportation & logistics, precision engineering in addition to pharmaceuticals & science of life. CLAR even expects rent development possibilities with rental escalations in the majority of the leases varying from 1% to 5% per annum. In-place rents are about 15% below market rents, states the REIT executive in its Oct 7 announcement.
Must the acquisitions be completed on Jan 1, 2024, CLAR’s DPU is expected to improve by around 0.124 cents or 0.8% for the FY2024 finished Dec 31, 2024 on a pro forma basis.
The portfolio, that comprises of a four-storey ramp-up logistics estate at 2 Pioneer Field 1; Tuas Connection, a light industrial property on Tuas Loop comprising 15 double-storey industrial units; and an eight-storey high-specifications industrial property at 9 Kallang Sector, are going to increase the value of CLAR’s Singapore account to about $12.3 billion. Upon the conclusion of the procurement around 1Q2026, CLAR’s Singapore portfolio will represent 68% of its overall assets under management (AUM).
