Clar Plans Divest Buroh Property Significant Premium Cost And Valuation
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CapitaLand Ascendas REIT (CLAR) has announced the sale of its property located at 21 Jalan Buroh in Singapore for $112.8 million. The three-storey ramp-up warehouse with a seven-storey ancillary office block was originally acquired by CLAR in 2006 for $58.4 million. This proposed sale price represents a significant premium to the original purchase price and is also higher than the average of two independent market valuations at $67.5 million as of July 1.
The estimated sale proceeds are expected to be $102.9 million. However, this divestment is not expected to have any impact on CLAR’s Net Asset Value (NAV) or Distribution Per Unit (DPU) for the financial year 2024. On a pro forma basis, there would be a decrease of $4.6 million in Net Property Income (NPI) and a decline of 0.085 cents in DPU. The pro forma aggregate leverage would also decrease from 37.9% to 37.4%. In the financial year 2024, CLAR’s NPI was $1.032 billion, and DPU was 15.16 cents.
The sale is expected to be completed in the fourth quarter of 2024. After the completion of this sale, CLAR will own 228 properties, including 96 properties in Singapore, 34 properties in Australia, 48 properties in the United States, and 50 properties in the United Kingdom/Europe.
In other news, Nuveen Real Estate has also announced the sale of its stake in the Edinburgh mixed-use project St James Quarter and W Edinburgh Hotel. This divestment highlights the current trend of real estate companies looking to sell off non-core assets to focus on their core business and improve their financials.