Capitaland Ascendas Reit Proposes Acquire Three Industrial And Logistics Properties Singapore 5658
CapitaLand Ascendas REIT (CLAR) has announced proposed plans to acquire three prime properties in Singapore, amounting to a total consideration of $565.8 million. This figure includes estimated upfront land and enhancement premiums of $33.2 million. The portfolio, which is independently valued at approximately $589 million, consists of a four-storey ramp-up logistics property at 2 Pioneer Sector 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.
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If the acquisition is completed in the first quarter of 2026, it will increase the value of CLAR’s Singapore portfolio to approximately $12.3 billion. This will also result in Singapore assets accounting for 68% of CLAR’s total assets under management (AUM). The target properties are fully occupied by 19 tenants, with a long weighted average lease expiry (WALE) of approximately 5.5 years. These tenants are publicly listed companies and multinational corporations in various industries such as electronics & semiconductors, transportation & logistics, precision engineering, and pharmaceuticals & life sciences.
The REIT manager expects rental growth opportunities with rental escalations in most of the leases ranging from 1% to 5% per annum. Additionally, in-place rents are currently 15% below market rents. The proposed acquisition is expected to be accretive to CLAR’s distribution per unit (DPU). The expected first-year net property yield is around 6.4% pre-transaction costs and 6.1% post-transaction costs.
If the acquisitions are completed on January 1, 2024, CLAR’s DPU is expected to improve by approximately 0.124 cents or 0.8% for the financial year 2024 ended December 31, 2024, on a pro forma basis.
To facilitate the acquisitions, CLAR’s trustee has entered into conditional put and call option agreements with DBS Trustee Limited for 2 Pioneer Sector 1 and Tuas Connection. DBS Trustee is also the trustee of Supreme REIT. In addition, CLAR’s trustee has entered into a share sale agreement with Supreme REIT and Clay SG Holdings I Pte. Ltd to acquire 100% of the issued share capital of Waterbay Investment Pte. Ltd., the registered proprietor of the property located at 9 Kallang Sector.
William Tay, executive director and CEO of CLAR’s manager, comments, “These accretive acquisitions build on our recent acquisitions of a Tier III colocation data centre and a premium business space property, which were completed in August.” He believes that the properties’ strong lease profile presents a rare and attractive opportunity in Singapore’s industrial property market and will enhance the resilience of CLAR’s income stream.
In related news, CLAR has also expanded its logistics portfolio in the UK through the acquisition of a property for $350.1 million. Additionally, the REIT has also acquired properties in Tai Seng and Science Park Drive for a combined $700 million. It has also expanded its US logistics portfolio through its first sale and leaseback acquisition for $150.3 million.
This story first appeared on The Edge Singapore website.