CapitaLand Ascendas REIT divests three properties in Australia at a premium to valuation
Singapore, 20 December 2023 – CapitaLand Ascendas REIT Management Limited, as the manager (the “Manager”) of CapitaLand Ascendas REIT (“CLAR”), is pleased to announce that CLAR has, through its relevant subsidiaries (being Perpetual Corporate Trust Limited as trustee for the Ascendas Longbeach Trust No. 4 and The Trust Company Limited as trustee for the Ascendas Longbeach Trust No. 7), entered into three put and call option deeds today for the sale of three logistics properties, namely, 77 Logistics Place, 62 Sandstone Place and 92 Sandstone Place (collectively, the “Properties”) located in Queensland, Australia to AM QLD Industrial Property Pty Ltd ATF AM QLD Industrial Property No.1 Unit Trust, AM QLD Industrial Property No.2 Pty Ltd ATF AM QLD Industrial Property No.2 Unit Trust and AM QLD Industrial Property No.3 Pty Ltd ATF AM QLD Industrial Property No.3 Unit Trust, respectively (the “Proposed Divestment”).
On exercise of the option, a contract for the sale of each of the Properties will be entered into and this may be with AM QLD Industrial Property Pty Ltd ATF AM QLD Industrial Property No.1 Unit Trust, AM QLD Industrial Property No.2 Pty Ltd ATF AM QLD Industrial Property No.2 Unit Trust and AM QLD Industrial Property No.3 Pty Ltd ATF AM QLD Industrial Property No.3 Unit Trust or an approved nominee. The put and call options are exercisable in early 2024 with completion under the sale contracts to follow soon after.
The total sale consideration for this transaction amounts to S$64.2 million[1] (A$73.0 million) (the “Sale Consideration”). The Sale Consideration represents a premium of 6.2% over the total market valuation of the Properties of S$60.4 million[2] (A$68.75 million) as at 31 August 2023. The Sale Consideration is not expected to have any material impact on CLAR’s net asset value and distribution per Unit for the financial year ending 31 December 2023.
The Proposed Divestment aligns with the Manager’s proactive asset management strategy to improve the quality of CLAR’s portfolio and optimise returns for unitholders of CLAR (“Unitholders”).
Assuming the Proposed Divestment had been completed on 1 January 2022, the proforma impact on CLAR’s net property income and distribution per Unit for the financial year ended 31 December 2022 would have resulted in a decrease of S$3.9 million and S$0.040 Singapore cents, respectively.
Net proceeds after deducting divestment costs are expected to be S$60.8 million (A$69.2 million). These proceeds may be utilised for various purposes, including financing committed investments, repaying existing indebtedness, extending loans to subsidiaries, funding general corporate and working capital needs, and/or making distributions to Unitholders. For the purpose of calculating the proforma impact on CLAR’s aggregate leverage, if the net proceeds were used to repay CLAR’s borrowings as at 31 December 2022, it would have led to a decrease in aggregate leverage from 36.3% to approximately 36.1%.
The Proposed Divestment is expected to complete within the first quarter of 2024. Following the completion, CLAR will own 228 properties comprising 97 properties in Singapore, 33 properties in Australia, 48 properties in the United States, and 50 properties in the United Kingdom/Europe.
In accordance with the trust deed dated 9 October 2002 constituting CLAR (as amended, varied, and/or supplemented from time to time), the Manager is entitled to a divestment fee of 0.5% of the Sale Consideration of the Properties, which will be paid in cash.
About the Properties
77 Logistics Place, Queensland, Australia
Acquired in November 2015, 77 Logistics Place is located in the Larapinta suburb, approximately 20 kilometres southwest of the Brisbane Central Business District. This property consists of a warehouse facility with access through four covered on-grade doors and two recessed docks. It has a lettable area of 13,886 square metres (“sqm”).
62 Sandstone Place and 92 Sandstone Place, Queensland, Australia
Acquired in October 2015, 62 Sandstone Place and 92 Sandstone Place are located within the Southlink Business Park in Parkinson, approximately 21 kilometres south of the Brisbane Central Business District. 62 Sandstone Place has a lettable area of 9,260 sqm that includes a temperature-controlled paper storage area and workshop. 92 Sandstone Place is a modern industrial facility with a lettable area of 13,738 sqm. It features 10 internal recessed docks and two recessed docks, with a minimum internal height clearance of 10 metres.
[1] An illustrative exchange rate of A$1.00000:S$0.87895 is used for all conversions from Australian Dollar amounts into Singapore Dollar amounts in this news release.
[2] The valuations for the Properties were commissioned by the Manager and HSBC Institutional Trust Services (Singapore) Limited (in its capacity as trustee of CLAR), and were carried out by Knight Frank Valuation & Advisory Queensland using the capitalisation approach and discounted cash flow approach.