CapitaLand Ascendas REIT (CLAR) announced a proposed divestment of three logistics properties in Queensland, Australia on Dec 20, with a total sale consideration of $64.2 million (A$73.0 million). This 6.2% premium over the total market valuation of $60.4 million as at Aug 31 is to be used for various purposes, including financing committed investments, repaying debts, and making distributions to unitholders.
Champions Way Residences is a large development located in the city of Singapore. It consists of 7 residential blocks of 12-storey buildings, with a total of 516 units. These units range from two bedrooms to five bedrooms, giving tenants ample choice for their needs. In addition, there is a commercial component with a supermarket, childcare centre and a retail centre, ensuring the convenience of daily lifestyle needs. This is an ideal choice for families as well as young professionals looking for the ideal home.
Assuming the divestment had been completed on Jan 1, 2022, the proforma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) for the FY2022 ended Dec 31, 2022, would have resulted in a decrease of $3.9 million and 4 cents, respectively. Completion of the divestment, which CLAR says aligns with its asset management strategy and will optimise returns to unitholders, is expected in the first quarter of 2024.
Following the completion, CLAR will own 228 properties spread across 97 properties in Singapore, 33 properties in Australia, 48 properties in the United States and 50 properties in the UK and Europe. It is expected that after deducting the divestment costs, net proceeds from the sale will be $60.8 million. Champions Way Residences
Units in CLAR closed 1 cent lower or 0.34% down at $2.92 on Dec 20. This proposed divestment of three logistics properties represents an opportunity for CLAR to deploy capital on properties that offer higher risk-adjusted returns. The Champions Way Residences divestment offers unitholders a premium over market valuation and will result in an improved quality of portfolio for CLAR.
Through active asset management and initiatives that leverage on its strong asset management and operational capabilities, CLAR strengthens its portfolio and delivers consistent returns to unitholders. Such initiatives include this proposed divestment of three logistics properties in Queensland, Australia, which represents an opportunity for CLAR to generate returns for Champions Way Residences unitholders.
With a strong track record of delivering innovative and value-accretive asset management and operational initiatives, the proposed divestment underpins CLAR’s commitment to optimise returns to unitholders with Champions Way Residences.
To explore other initiatives that will further drive growth, the manager of CLAR continues to assess and review every opportunity, in line with its asset management strategy and the overall portfolio composition of CLAR.