CapitaLand Ascendas REIT is on a shopping spree, with the acquisition of numerous asssets for around $1.41 billion, including its foray into Japan. This means since last December, CLAR is spending or has spent more than $2.2 billion to beef up its portfolio.
According to its announcement on March 24, CLAR is taking a 49% interest in a Tier III hyperscale data centre in Greater Osaka for $620.7 million. The remaining interest in the data centre is held by a fund managed by Mitsui.
Next, CLAR is acquiring 25 Loyang Crescent, a cluster of ramp-up logistics and industrial buildings for $504.2 million. Last but not least, in a 50-50 split with an unnamed "global sovereign wealth fund", CLAR is spending $245 million to buy Ascent at 2 Science Park Drive.
To fund the acquisitions, CLAR has launched a private placement to raise at least $600 million. It will do so by offering to sell at between 244.9 million and 249.4 million units at a between $2.406 and $2.45 per unit.
In addition, CLAR is launching a non-renounceable preferential offering of new units at between $2.35 and $2.40 per to raise the remaining $300 million.
Financial institutions involved in this deal in one way or another include DBS Bank, JP Morgan Securities Asia, Oversea-Chinese Banking Corporation, United Overseas Bank, and Mizuho Securities (Singapore).
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This attempt at raising equity comes just a day after Lendlease Global Commercial REIT's fund raise to help fund the acquisition of Paya Lebar Quarter was under-subscribed with just over 62% of the units offered spoken for.
According to CLAR, these three acquisitions would have added 0.318 cents to its DPU, or 2.1%, if these acquisitions were completed by Jan 1 2025.
"These assets strengthen our presence in Singapore where we have strong market leadership in business space and life sciences as well as logistics, while expanding into developed markets such as Japan with healthy market fundamentals and demand drivers," says William Tay, CEO of the manager.
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"CLAR’s new expansion into Japan reflects our disciplined approach to scaling and diversifying CLAR’s global data centre portfolio across key established digital hubs with strong demand drivers and connectivity."
Upon completion of the acquisitions, CLAR's occupancy and WALE will increase to 91.5% and 4.3 years respectively.
CLAR says there are also organic growth opportunities with annual rent escalations in most of the leases and potential capacity expansion of 5.4 megawatts (MW) or 13.3% at the 40.5MW hyperscale data centre in Japan.
As a recap, between last December and February, CLAR had completed $845.7 million worth of acquisitions, including first, a portfolio of three industrial and logistics properties in Singapore for $565.8 million; DHL Canal Winchester, a Class A logistics property in the US for $94.5 million; as well as six prime logistics properties in UK/Europe (Spain) for $185.4 million.
Assuming all six acquisitions were completed on 1 January 2025, the pro forma DPU accretion is expected to be 4.1% or approximately 15.616 cents.
Following the acquisitions and the equity fundraising, CLAR’s pro forma aggregate leverage is expected to increase to 39.7% from 39.0% as at 31 December 2025.
CLAR units closed at $2.50 on March 23.
