Singapore REIT to convert San Diego office property to life sciences property

Singapore REIT to convert San Diego office property to life sciences property

Singapore-listed real estate investment trust CapitaLand Ascendas Reit(CLAR), formerly known as Ascendas Real Estate Investment Trust (Ascendas Reit), has signed a full building lease agreement with Crinetics Pharmaceuticals, Inc., for its new global headquarters at 6055 Lusk Boulevard, San Diego, United States.

Under the agreement, the Reit will undertake a convert-to-suit exercise and transform the office property into a premier life sciences property at an estimated cost of US$40 million (approximately S$56.4 million).

When completed in 4Q 2023, the redeveloped two-storey, 94,230 sq ft property will be a cutting-edge, high-performance and LEED Gold-certified life sciences building that exceeds the extensive requirements of today’s life science tenants.

The building will be outfitted with new mechanical, electrical and plumbing (MEP) systems, roof, windows and interior improvements, which include state-of-the-art laboratories, office and vivarium spaces. The energy efficient building will have solar panels as well as extensive indoor and outdoor spalike amenities to improve employee well-being.

The property is located in Sorrento Mesa, one of the top life science submarkets within the United States.

”The conversion to life sciences space will enable CLAR to ascribe a higher base rent with an annual escalation of 3% and a net property income yield pick-up of approximately 9% when completed. The triple-net lease commitment of 11.5 years, with an option to extend two additional five-year terms, by Crinetics Pharmaceuticals will provide CLAR with a stable income stream,” said the Reit in a statement.

William Tay, Chief Executive Officer and Executive Director of the Manager said, “We are delighted to announce this partnership with Crinetics Pharmaceuticals. This initiative will have long term benefits for both our companies. We are confident that Crinetics’ new global headquarters at 6055 Lusk Boulevard will be a standout in the Sorrento Mesa area, featuring comprehensive cutting-edge office and laboratory facilities as well as LEED Gold certification. This venture will solidify and enlarge CapitaLand Ascendas REIT’s track record in the life sciences space and foster even more opportunities for us. At the same time, our returns will be boosted based on a higher and more attractive property yield of approximately 9%.

After the completion of the project in 4Q 2023, the proportion of our life sciences properties is estimated to increase to S$1.3 billion or about 8% of our assets under management, on a pro forma basis.”