Capitaland Ascendas Reit Proposes Acquire Three Industrial And Logistics Properties Singapore 5658
CapitaLand markets 89.4 mil new CLAR units at $2.97 apieceTAGS
CapitaLand Ascendas REIT (CLAR) is looking to purchase three properties in Singapore at a total cost of $565.8 million, which includes an estimated upfront land and enhancement premiums of $33.2 million. The portfolio is valued at around $589 million by external valuers and comprises a four-storey ramp-up logistics property, Tuas Connection, and an eight-storey high-specifications industrial property. Upon completion of the acquisition in the first quarter of 2026, CLAR’s Singapore portfolio will account for 68% of its total assets under management (AUM).
The target properties are fully occupied by 19 tenants with a long weighted average lease expiry (WALE) of around 5.5 years. These tenants are leading companies in industries such as electronics & semiconductors, transportation & logistics, precision engineering, and pharmaceuticals & life sciences. The REIT manager expects rental growth opportunities with annual rental escalations ranging from 1% to 5% in most leases. In-place rents are currently about 15% below market rents, providing potential for future rental increases.
The proposed acquisitions are expected to boost CLAR’s distribution per unit (DPU) and the first-year net property yield is estimated to be around 6.4% pre-transaction costs and 6.1% post-transaction costs. If the acquisitions are completed on January 1, 2024, the DPU is projected to increase by approximately 0.124 cents or 0.8% for the fiscal year ending December 31, 2024 on a pro forma basis.
In connection with the acquisitions, CLAR’s trustee has entered into conditional agreements with DBS Trustee Limited for two properties, and with Supreme REIT and Clay SG Holdings I Pte. Ltd for the third property. These agreements include a put and call option for two properties and a share sale agreement for the third property, which is owned by Waterbay Investment Pte. Ltd.
Executive Director and CEO of CLAR’s manager, William Tay, says the acquisitions are a solid addition to the REIT’s portfolio, following the recent purchase of a Tier III colocation data centre and a premium business space property in August. Tay also notes the properties’ strong lease profile, which is a rare and attractive opportunity in Singapore’s industrial property market and will enhance the resilience of CLAR’s income stream.
This story was originally published on businesstimes.com.sg.
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