Ascendas REIT to buy business parks in US and Singapore for $1.2bn

Ascendas REIT to buy business parks in US and Singapore for $1.2bn
15435 Innovation Drive, a multi-tenanted property in San Diego from the portfolio of 28 freehold office properties in the US. Photo:Courtesy of CapitaLand

Ascendas Real Estate Investment Trust (Ascendas Reit) has announced the proposed acquisitions of a portfolio of 28 business park properties located in the United States and two business park properties located in Singapore for S$1.66 billion ($1.22 billion) from its controlling unit holder CapitaLand Ltd.

“We are really excited to acquire these properties in the US and Singapore. Their strategic locations and strong tenant base will allow us to tap into the growing information technology, financial, and medical and healthcare sectors. They are already DPU and DPU yield accretive, and we know that they will contribute positively and augment the sustainability of Ascendas Reit’s earnings,” said William Tay, Executive Director and Chief Executive Officer of the Manager in a statement.

The US properties comprises 28 business park properties located in the US tech cities of Raleigh, Portland and San Diego.

”The US Properties will provide further geographical diversification to Ascendas Reit’s portfolio,” said in a statement.

”The proportion of overseas investment (by asset value) is expected to increase to 28% of total asset value of S$12.8 billion. The US properties will constitute about 10% of total asset value.”

Investment grade tenants within the US Properties include CareFusion Manufacturing, TD Ameritrade, Oracle and Nike.

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The two Singapore business park properties are Nucleos and FM Global Centre. Nucleos is located at Biopolis, the biomedical research and development hub at onenorth which hosts a cluster of world-class research facilities. FM Global Centre is located at the gateway of Singapore Science Park 2, Singapore’s technology corridor for R&D and technology development.

”These properties have a long average remaining land lease to expiry of 56.7 years, which will lengthen Ascendas Reit’s portfolio weighted average land lease to expiry (excluding freehold properties) from 44.1 years to 44.6 years as at 30 September 2019, said in the statement.

”In addition, the properties have a high average occupancy rate of 94.6% and a long WALE of 6.9 years. Income stability from these properties are underpinned by the high-quality tenants such as DuPont, Takeda and FM Global.”