CapitaLand Ascendas Reit buys US property from DHL unit for S$94.5 million

The manager of CapitaLand Ascendas Reit (Clar) on Friday (Jan 16) announced its purchase of a logistics property in Columbus, Ohio, in the US for S$94.5 million, payable in cash.

Once the deal with DHL’s subsidiary, RES Canal Winchester I, is completed in the first quarter of the year, the DHL Canal Winchester will be leased back to DHL. It is Clar’s second sale-and-leaseback transaction with DHL in the US, following the one with DHL Indianapolis Logistics Center in January 2025.

The acquisition by Clar’s wholly owned subsidiary, Ascendas Reit Columbus 1, is distribution per unit (DPU) accretive on a pro forma basis, said the manager. Had it been completed on Jan 1, 2024, the DPU accretion would have been about S$0.000012 or 0.1 per cent.

The first-year net property income yield of the acquisition is at about 7.4 per cent of pre-transaction costs and 7.2 per cent of post-transaction costs.

“The accretive acquisition underscores our strategy of selectively investing in logistics growth markets in the US with excellent connectivity and deep occupier demand,” said William Tay, CEO of the manager.

The property was bought at a 3.3 per cent discount to the independent market valuation of S$97.7 million as at Jan 1, said the manager. The total acquisition cost stands at S$96.4 million, which will be financed through a combination of internal resources, divestment proceeds and/or existing debt facilities.

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DBS analyst Dale Lai viewed the discount positively, stating that it provides “immediate value uplift”, and set a target price of S$3.20 while reiterating a “buy” call.

Tay added that DHL Canal Winchester will strengthen Clar’s income resilience because its long-term lease runs until December 2030, with options to renew for two additional five-year terms, and built-in annual rental escalations of 3.5 per cent.

Lai said: “The presence of built-in annual rental escalations, together with extension options, provides clear visibility on organic income growth and underpins the resilience of cash flows over the longer term.”

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It will also increase the proportion of modern logistics assets in Clar’s US logistics portfolio (by assets under management) to 52.4 per cent.

The property was completed in 2024 and comprises a single-storey logistics building with a gross floor area of 755,160 square feet. It has a “long” weighted average lease expiry of about five years.

The manager said the Columbus location will give it a foothold in the Midwest, a “key logistics market”. Columbus is the sixth-largest logistics market in the Midwest, based on its market size of about 307.1 million sq ft, and demand for industrial space continues to be robust.

Positive net absorption outpaced new construction vacancies in 2025, which led to a decline in the vacancy rate for three consecutive quarters to 7 per cent in the third quarter.

Meanwhile, average asking rents in the market for industrial space went up 2.5 per cent year on year, said the manager, citing CBRE data.

Lai also noted that borrowing costs in the US are currently in the mid-4 per cent range and the trend of interest rates falling could create more “attractive acquisition opportunities” in the US market.

This helps the feasibility of further yield-accretive deals, particularly for high-quality logistics assets with strong tenant covenants, he added.

However, the DBS analyst estimated that the acquisition, together with the three recently completed acquisitions in Singapore, is expected to push Clar’s gearing to just above 40 per cent.

Still, it could see some uplift in portfolio valuations as at Dec 31, 2025, which Lai said should “help moderate gearing levels and bring them back towards the 40 per cent mark”.

“Given Clar’s strong track record of growth through acquisitions, we expect the Reit (real estate investment trust) to remain active in the 2026 financial year, with future transactions likely to be supported by fundraising,” he said.

Units of Clar rose 0.7 per cent or S$0.02 to close at S$2.86 on Friday.

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