CapitaLand Ascendas REIT proposes to acquire three industrial and logistics properties in Singapore for $565.8 mil
CapitaLand Ascendas REIT (CLAR) is suggesting to acquire three properties in Singapore for a full consideration of $565.8 million, that includes the approximated upfront land and enhancement premiums of $33.2 million. The collected of the account is separately worth at approximately $589 million.
The target properties are completely occupied by 19 tenants with a long weighted average lease expiry (WALE) of about 5.5 years. These renters are openly listed firms and global firms in markets including electronic devices & semiconductors, transportation & logistics, precision manufacturing as well as pharmaceuticals & biology. CLAR even anticipates rental development possibilities with rental escalations in most of the leases ranging from 1% to 5% per annum. In-place rents are about 15% below market rents, states the REIT executive in its Oct 7 announcement.
He adds that the properties’ “strong contract account” is a “rare and appealing chance” in Singapore’s industrialized real estate market and will “enhance the resilience of CLAR’s income flow.”
The recommended procurement is expected to be accretive to CLAR’s distribution per unit (DPU). The expected first year net property yield is about 6.4% pre-transaction fees and 6.1% post-transaction prices.
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 ended Dec 31, 2024 on a pro forma basis.
CLAR’s trustee has additionally become part of a share sale agreement with Supreme REIT and Clay SG Holdings I Pte. Ltd to obtain 100% of the released share capital of Waterbay Investment Pte. Ltd., the listed proprietor of the property located at 9 Kallang Sector.
The account, which consists of a four-storey ramp-up logistics real estate at 2 Pioneer Market 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, will grow the value of CLAR’s Singapore account to around $12.3 billion. Upon the conclusion of the acquisition around 1Q2026, CLAR’s Singapore account will represent 68% of its overall assets under management (AUM).
In accordance with the purchases, CLAR’s trustee has actually become part of conditional put and call option contracts with DBS Trustee Limited for 2 Pioneer Sector 1 and Tuas Connection. DBS Trustee is the trustee of Supreme REIT.
” These accretive purchases build on our current acquisitions of a Tier III colocation information centre and a premium business spot property which were completed in August,” claims William Tay, executive director and CEO of CLAR’s executive.
