Ascendas REIT obtains 11 last mile logistics properties in the US
(C) Provided by Singapore Business Review
These were obtained for £207.8m. Ascendas Funds Management Limited announced that Ascendas REIT has proposed the acquisition of a portfolio of 11 logistics properties based in Kansas City, United States. A value of £207.8m (US156m) was announced as well for the property.
This, according to William Tay, executive director and CEO of Ascendas Funds Management, is the first foray of the company into the US logistics market. Reasons for the acquisition lay with the growth potential of the property given its location and the high demand for this portfolio.
200,000 square metres (sqm) of last-mile logistics space make up the property. Kansas City’s logistics sector is also supported by a skilled workforce and central location between cities such as Chicago, St.
Louis, Dallas, and Denver. The city also has access to Kansas City International Airport, a prime location for air cargo and distribution development. Also within proximity to the acquisition are the established submarkets of South Johnson County, North Johnson County, Eastern Jackson County, and Northland.
All in all, these hold around 70% of the overall inventory of the Kansas City Market. As a city, Kansas is ranked 17th in the US based on logistics market size at approximately 27.9 million sqm. E-commerce, third-party logistics, food and beverage, and automotive manufacturing have served as primary demand drivers for logistics in Kansas City.
92.6% of the portfolio is occupied by 27 customers from different industries. With the completion of this, the logistics portfolio of Ascendas Reit will be spread amongst Australia, Singapore, the UK, and the US. The estimated net property income yield for the first year after the acquisition of the property is around 5.1% and 5% pre-transaction and post-transaction costs, respectively.
To finance this, the proceeds from its recent divestments of the three logistics properties in Australia will be used.
An independent valuation of the property concluded an aggregate market value of £210,23m (US£ 156.3m).
A total purchase consideration of £207.8m (US£156m) was negotiated after a purchase and sale agreement with the vendor.
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