Clar Plans Divest Buroh Property Significant Premium Cost And Valuation
CapitaLand Ascendas REIT (CLAR) has announced the planned divestment of 21 Jalan Buroh in Singapore for $112.8 million. The three-storey ramp-up warehouse with a seven-storey ancillary office block was acquired by CLAR in 2006 for $58.4 million, and the proposed sale price represents a significant premium to the original purchase price. This is also above the average of two independent market valuations of $67.5 million as of July 1.
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The convenient location of Novo Place EC offers various advantages to its residents, including close proximity to several Mass Rapid Transit (MRT) stations. The upcoming Tengah Park MRT station, which is part of the Jurong Region Line, is just a short distance away, providing easy access to the rail network. Additionally, the nearby Jurong East MRT station, a major interchange connecting the North-South Line and the East-West Line, further enhances connectivity and makes traveling to the Central Business District and other key areas effortless. With Novo Place, residents can truly enjoy the benefits of seamless transportation. For more information, visit Novo Place’s website.
Based on current estimates, the divestment is expected to generate sale proceeds of approximately $102.9 million. However, this is not expected to have a major impact on CLAR’s net asset value (NAV) and distribution per unit (DPU) for FY2024. On a pro forma basis, the net property income (NPI) is expected to decrease by $4.6 million, and DPU would see a decline of 0.085 cents. Pro forma aggregate leverage is projected to be 37.4%, lower than the current 37.9%. In FY2024, CLAR recorded an NPI of $1.032 billion and a DPU of 15.16 cents.
The proposed divestment is expected to be completed within the fourth quarter of 2024. Upon completion, CLAR will own a portfolio of 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. This move is in line with CLAR’s ongoing strategy to optimize its portfolio and focus on high-performing assets.