CapitaLand Ascendas REIT (CLAR) (SGX:A17U
) announced that it is acquiring 5 Tuas Avenue 5 for a total consideration of $133.9 million from Hup Hin Transport.
According to CLAR, the property is currently fully occupied by four tenants including Hup Hin Transport. Post acquisition, the property will have a weighted average lease expiry of 5 years with annual rental escalation of 2.0% under a triple-net lease structure.
The manager says that the property is a modern ramp-up logistics asset that was completed in 2021 and the purchase consideration was negotiated on a willing-buyer and willing-seller basis and is payable in cash.
The purchase consideration is a 1.5% discount to the independent market valuation of $136 million as at Feb 1.
CLAR expects this acquisition to be distribution per unit (DPU) accretive on a pro forma basis and will further enhance CLAR’s stable income stream. Assuming the acquisition was completed on Jan 1, 2025, CLAR’s DPU accretion is expected to be around 0.033 cents or 0.2%.
CLAR shares that the first-year net property income (NPI) yield of this acquisition is around 6.6% pre-transaction costs and 6.5% post-transaction costs.
“5 Tuas Avenue 5 will enhance our presence in western Singapore, which continues to benefit from structural demand drivers, including the expansion of Tuas Mega Port and supporting infrastructure. The long five-year lease term provides CLAR with income visibility and stable cash flows, underpinned by the fixed annual rental escalation,” says William Tay, CEO of the manager.
As at 9.10am, Units in CLAR was trading 3 cents lower or 1.2% down at $2.47.
