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CapitaLand Group
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CapitaLand Ascendas REIT embarks on its first logistics developments in the UK for S$350.1 million
Developments will expand CLAR’s presence in the East Midlands, a key logistics hub in the UK, with best-in-class, green-certified assets
11 Aug 2025
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CLAR continues to expand its logistics presence in the UK with the DPU-accretive acquisition of two plots of freehold land in East Midlands. It will embark on its first logistics developments in the UK with a single-storey logistics property at Manton Wood (top) and three single-storey logistics assets in Towcester (bottom) for a total investment cost of S$350.1 million. Including these four new developments, CLAR has a total of eight ongoing projects comprising developments, redevelopments and asset enhancement initiatives worth approximately S$850 million.
Singapore, 11 August 2025 – CapitaLand Ascendas REIT Management Limited, as the manager (the “Manager”) of CapitaLand Ascendas REIT (“CLAR”), is pleased to announce the proposed acquisitions (the “Proposed Acquisitions”) of two plots of freehold land in the East Midlands, a key logistics market in the United Kingdom (“UK”). A total of four new logistics properties will be developed (the “Proposed Developments”) on the land plots known as Manton Wood and Towcester (the “Properties”). With one and three logistics properties to be developed at Manton Wood and Towcester respectively, the estimated total investment cost is approximately S$350.1 million1 (£203.5 million) (the “Total Investment Cost”).
Mr William Tay, Executive Director and CEO of the Manager
Embarking on our inaugural logistics developments in the UK marks a significant step forward in our strategy to scale up CLAR’s UK logistics portfolio. With positive structural drivers such as e-commerce and onshoring anticipated to sustain demand, these four new properties are set to boost the asset value of CLAR’s UK logistics portfolio by 43.5% to approximately S$1.2 billion. Adding these best-in-class and green-certified logistics properties enhances CLAR’s logistics portfolio in the East Midlands, a key market in the UK’s logistics heartlands, and capitalise on occupiers’ demand for high-quality and well-located space.
Including these two new projects, CLAR has a total of eight ongoing projects comprising developments, redevelopments and asset enhancement initiatives in Singapore, the US and UK worth approximately S$850 million that will create long-term value for Unitholders.
- Mr William Tay, Executive Director and Chief Executive Officer of the Manager -
Rationale and Merits of the Proposed Acquisitions
1. Opportunity for expansion in the UK, complementing CLAR’s existing UK logistics portfolio
The Proposed Developments align with CLAR’s strategy to expand its logistics portfolio in the UK where demand is expected to be underpinned by e-commerce growth and occupiers’ evolving supply chain strategies2.
The Properties are strategic fits with CLAR’s existing logistics assets which are spread across key industrial areas and established distribution centres in the UK with good connections to core urban areas.
When completed, the Proposed Developments will grow the UK logistics portfolio to 42 investment properties and increase the assets under management (“AUM”) value by 43.5% to approximately S$1.2 billion3. CLAR’s UK portfolio will also increase by 27.2% to approximately S$1.6 billion and the UK portfolio will account for 10% of CLAR’s total AUM of S$17.2 billion3.
Location of Manton Wood property
Location of Towcester properties
2. Strategically located in the East Midlands, a key logistics hub in the UK
The Properties will grow CLAR’s presence in the East Midlands, one of the UK’s traditional logistics heartlands due to its centralised location and connectivity with the rest of the country. The East Midlands consists of major cities such as Derby, Leicester, Nottingham and Northampton, and is connected by major motorways and roads such as the M1, A1 and A5 which are strategic north-south corridors in England. East Midlands Airport is the second largest cargo airport in the UK and is a major global hub for various third-party logistics providers (“3PLs”) such as DHL, UPS and FedEx, as well as the Royal Mail4. In 2024, the East Midlands market accounted for the largest share (30%) of logistics take-up in the UK. It is one of the tightest supplied regions with availability equal to 1.2 years of average annual take-up, quicker than the UK national average of 1.5 years5.
Located in Worksop, Nottinghamshire, Manton Wood boasts easy access to local and national distribution routes via the A1 (approximately 2 kilometres (“km”) away) and the national motorway M1 (approximately 16 km away). Due to its central location and excellent connectivity, key consumer and manufacturing hubs across the North East, North West, Midlands and Central London are all reachable within 4.5 hours by heavy goods vehicles6. The cities of Sheffield and Nottingham, which are located within an hour’s drive from Manton Wood, provide access to a large labour pool of over 2.1 million.
Towcester is in the UK’s logistics “Golden Triangle” of the Midlands, a region that has expanded due to the growth of warehouses and distribution premises driven by online retail, supply chain reconfiguration, improved connectivity and demand for faster nationwide delivery7. Situated in Towcester, Northampton West, the land plot is off the A43/A5 interchange and approximately 8 km from the M1. It is a 2-hour drive from London and over 83% of the UK population is reachable within a 4.5-hour drive6. Towcester is located within an hour’s drive from major towns such as Northampton, Milton Keynes and Banbury which provide access to a sizeable labour pool of over 2.3 million.
3. New best-in-class and green-certified logistics properties
The quality of CLAR’s portfolio will be enhanced by these best-in-class Properties which will increase the proportion of CLAR’s modern logistics assets in the UK to 70.6% of CLAR’s UK logistics portfolio by AUM.
The Properties will feature best-in-class building specifications and green certifications which positions them well to capture flight-to-quality demand from occupiers focusing on the domestic sector including 3PLs, retailers and other businesses in transport and storage.
At Manton Wood, a single-storey logistics property with a gross floor area (“GFA”) of approximately 42,900 square metres (“sq m”) will be developed. In Towcester, three single-storey logistics properties ranging from approximately 20,700 sq m to 38,300 sq m will be developed. Key building features include 15 to 18 metre eaves, ample trailer parking, good floor loading capacity and deep yards for operational efficiency. The X Large segment of the UK market, which is defined as greater than approximately 23,200 sq m in size, has the lowest availability rate of 5.1% and is the tightest supplied segment as of end 20245.
The Properties target to achieve BREEAM “Excellent” certifications and some green features include roof lights for natural daylight, roof-mounted solar photovoltaic systems and electric vehicle charging points. With a total GFA of approximately 135,600 sq m (approximately 1.5 million square feet), the Properties will increase the number of CLAR’s green-certified properties in the UK to 7 out of 42 properties, representing 26% of the GFA of the UK logistics portfolio8. For CLAR’s total portfolio, the percentage of green-certified properties will increase to 51% from 49%8.
4. Attractive net property income (“NPI”) yields9, 10
The stabilised NPI yield for the first year for the Properties is expected to be approximately 7.3% pre-transaction costs and 6.9% post-transaction costs.
5. Distribution per Unit (“DPU”) accretive acquisitions10, 11
Assuming the Proposed Developments were completed on 1 January 2024, the pro forma impact on the DPU for the financial year ended 31 December 2024 is expected to be an improvement of approximately 0.021 Singapore cents or a DPU accretion of 0.14%.
The Proposed Developments are DPU accretive on a standalone project basis. Please refer to Annex A for more details on the land plots and Properties.
Details of the Proposed Acquisitions
The two plots of land will be acquired from DHL Real Estate (UK) Limited. The Proposed Acquisitions are expected to be completed in 3Q 2025. The Proposed Developments of the four properties at Manton Wood and Towcester are expected to commence in 1H 2026 and complete in 1H 2027 and 2H 2028, respectively.
The Total Investment Cost is estimated to be approximately S$350.1 million (£203.5 million), which includes approximately S$18.9 million ((£11.0 million) for the plot of land at Manton Wood, S$78.1 million (£45.4 million)12 for the plot of land at Towcester13, development costs and other transaction-related fees and expenses.
The valuation of the plot of land at Manton Wood, on which a logistics property would be developed, is S$22.9 million (£13.3 million)14.
The valuation of the plot of land at Towcester, on which three logistics properties would be developed, is S$81.9 million (£47.6 million)13,15.
The development management fees payable to the Manager are estimated to be S$9.4 million (£5.5 million)16.
The Manager intends to finance the Total Investment Cost through a combination of internal resources and/or existing debt facilities.
Waiver from Compliance with Paragraph 7.1(c) of the Property Funds Appendix
The acquisition of the plot of land at Towcester (the “Towcester Logistics Land”) also comes with an acquisition of a plot of land in the vicinity of (but not adjacent to) the Towcester Logistics Land (the “BNG Land”). The BNG Land is acquired to satisfy a biodiversity net gain condition in the planning permission for the Towcester Logistics Land.
As the BNG Land is not meant for development, a waiver from the requirement in paragraph 7.1(c) of Appendix 6 of the Code on Collective Investment Schemes (the “Property Funds Appendix”), which states that a REIT should not invest in vacant land, was sought from the MAS (the “Waiver”). The MAS has granted the Waiver17.
Please refer to Annex B for further details of the condition relating to biodiversity net gain and the Waiver.
Summary of Manton Wood property:
Summary of Towcester properties:
The planning permission pursuant to which the Towcester Logistics Land is being developed includes a biodiversity net gain condition (the “BNG Requirement”). Biodiversity net gain rules26 came into force in England in February 202427. However, prior to the biodiversity net gain rules coming into force in February 2024, some local planning authorities (“LPAs”) started to impose BNG conditions in their planning approvals. For example, the local planning policies for the area in which the Towcester Logistics Land is situated required all developments to deliver BNG, even before the change in the law. In this regard, in relation to the Towcester Logistics Land, the planning approval, which was granted by the LPA prior to February 2024, sets out the BNG Requirement in relation to this development.
To satisfy the BNG Requirement, CLAR would also be acquiring the BNG Land which comprises 14.46 acres of agricultural land28 located approximately 2 km north of the Towcester Logistics Land. On this BNG Land, habitat enhancement works will be undertaken, and the land will be maintained and managed in a natural state and not built up, to support biodiversity objectives for 30 years. The costs for the maintenance of this land will be recoverable from tenants at the three properties to be developed at Towcester.
As the BNG Land is not meant for development, a waiver from the requirement in paragraph 7.1(c) of the Property Funds Appendix was sought from the MAS. The MAS has granted the waiver.
The rationale for the waiver is as follows:
(i) CLAR is legally required to acquire the BNG Land if CLAR develops the Towcester Logistics Land, and the acquisition of the BNG Land is the most viable option to satisfy the BNG Requirement. Based on the specifications of the development of the Towcester Logistics Land, there is insufficient area to satisfy the BNG Requirement through creating biodiversity on-site. Setting aside more land for the BNG Requirement will affect the viability and value of the development. The only feasible option for CLAR would be to create biodiversity off-site.
(ii) CLAR is only acquiring the BNG Land in connection with the acquisition of the Towcester Logistics Land to comply with the BNG Requirement. CLAR would not hold the BNG Land if it does not hold the Towcester Logistics Land.
(iii) It is not the intention of CLAR to speculatively acquire vacant land for future development as the BNG Land is not meant to be developed.
The Waiver is subject to the condition that the following be disclosed in an announcement of the acquisition of the BNG Land and the Towcester Logistics Land (collectively, the “Proposed Transactions”) on the SGXNet:
(i) salient information on the Proposed Transactions (including the biodiversity net gain condition of the Towcester Logistics Land and the rationale for acquiring the BNG Land);
(ii) an undertaking from the Manager that CLAR will not hold the BNG Land without the Towcester Logistics Land29; and
(iii) the Waiver granted by the MAS and the condition attached.
The Waiver will cease to be valid if the BNG Requirement is no longer in place.
