CAPITALAND Ascendas Reit (Clar) will acquire a parcel of land in the US, and develop it into a new logistics property at an estimated total investment cost of about S$94.8 million.
The real estate investment trust will buy the land from Summerville Logistics Center Owner, which is indirectly wholly owned by the property’s developer PTLI Summerville Member.
Clar, through its wholly owned subsidiary, has entered into a joint venture (JV) agreement with PTLI. The Reit holds a 95 per cent interest in the JV, while the remaining 5 per cent is held by the developer.
The Reit intends to buy PTLI’s interest when the property is stabilised, said its manager on Friday (Nov 15).
Hence, the total investment cost of about S$94.8 million comprises Clar’s investment in the 95 per cent stake, the estimated costs of purchasing the developer’s interest at fair market valuation, as well as other related fees and expenses.
The total outlay will be financed through Clar’s internal resources and/or existing debt facilities, said the manager.
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William Tay, executive director and chief executive officer of the manager, said the development of the new logistics property is in line with the Reit’s strategy to expand its logistics portfolio, to capture growth potential in the sector.
“Marking our first development in the US, this opportunity will also enhance the quality of our portfolio with a new asset which generates long-term value for unitholders,” he added.
On a pro forma basis, the property – Summerville Logistics Center – will increase the Reit’s logistics assets under management in the US by 27.9 per cent to about S$434.1 million.
The stabilised net property income yield for the first year is about 7.6 per cent of pre-transaction costs and 7.2 per cent of post-transaction costs, said the manager.
Assuming the acquisition was completed on Jan 1, 2023, Clar’s distribution per unit (DPU) would have risen by 0.3 per cent. The pro forma impact on its DPU for the fiscal year ended Dec 31, 2023, would have also improved by about S$0.00041.
The development of Summerville Logistics Center is expected to be completed in the fourth quarter of 2025.
Spanning 138,362 square metres, the freehold logistics distribution property comprises two single-storey buildings. It will feature best-in-class building specifications and green certification, said the manager.
The property is situated on the east coast of the US, near Charleston in South Carolina. Other well-known manufacturing and logistics companies, such as The Boeing Company, Volvo Car USA and Mercedes-Benz Vans, are also in the vicinity.
Units of Clar ended 0.4 per cent or S$0.01 higher at S$2.62 on Thursday.
