To The Moon

Earlier last week, CapitaLand Ascendas Reit (Clar) $ASCENDAS REAL ESTATE INV TRUST(A17U.SI)$ announced the proposed acquisition of an integrated high-specification research and development (R&D) facility and business park property from Seagate Singapore International Headquarters for a purchase consideration of S$218.2 million.

The purchase represents a 5.1% discount to the independent market valuation of the property of S$230.0 million.

This brings the total count to five acquisitions which have been announced this year to date ending May 18, with a combined value exceeding S$2 billion.

These deals were made across various property types such as business parks, hotels, logistics, and retail assets, which span across Australia, India, Japan, Singapore, South Korea and the United States.

S-Reit acquisitions continue with Clar’s S$218 million buy

Among the five announced acquisitions, three of the largest announced were by Mapletree Logistics Trust (MLT) $MAPLETREE LOGISTICS TRUST(M44U.SI)$ , Frasers Centrepoint Trust (FCT) $FRASERS CENTREPOINT TRUST(J69U.SI)$ and Clar.

1. $MAPLETREE LOGISTICS TRUST(M44U.SI)$

In April, MLT announced the acquisition of six logistics assets located in Japan, and one logistics property in Sydney, Australia. The trust also entered into a binding memorandum of understanding for the acquisition of a logistics property in Seoul, South Korea.

MLT in May announced that it has entered into a sale-and-purchase agreement of the logistics asset in Seoul, South Korea. The total purchase consideration of S$913.6 million of the eight logistics properties is an average 4.0% discount to the properties’ total independent appraised value of S$972.7 million.

Clar’s latest acquisition, Seagate Singapore’s facility, is located at 26 Ayer Rajah Crescent in the one-north district in Singapore. The district is a key research and innovation business hub fostering R&D and high-technology activities in biomedical and life sciences, infocomm technology, media, science and engineering.

Clar currently has five assets in the one-north district and the completion of the proposed acquisition will further expand the real estate investment trust’s footprint in the one-north district by 13% to S$1.9 billion in assets under management and by 21% to 2.5 million square feet in net lettable area.

2. $ASCENDAS REAL ESTATE INV TRUST(A17U.SI)$

Upon completion, the proportion of Business Space and Life Sciences properties will increase to 49% or S$8.1 billion of Clar’s total investment properties valued at S$16.7 billion.

Seagate Singapore will enter into a 10-year leaseback of the property’s entire gross floor area, with the option to renew for an additional 10 years. The long lease term with built-in rent escalation of 2.5% per annum is expected to provide stability and resilience to the portfolio.

The acquisition is expected to be yield accretive and the pro forma impact on distribution per unit (DPU) is estimated to be an improvement of 0.110 Singapore cents or a DPU accretion of 0.7%, assuming the transaction was completed on Jan 1, 2022. The acquisition is expected to be completed in the second quarter of 2023.

3. $FRASERS CENTREPOINT TRUST(J69U.SI)$

Together with Frasers Property Group in January, FCT announced a proposed joint acquisition to acquire 50.0% interest in suburban retail mall Nex for S$652.5 million.

The trust notes that the investment in Nex further strengthens its focus in the suburban retail segment, where FCT already has an established platform and strong capabilities.

https://www.sgx.com/research-education/market-updates/20230522-reit-watch-s-reit-acquisitions-continue-clars-s218