Ascendas REIT Expanding Its US Logistics Holdings

Ascendas Real Estate Investment Trust, Singapore’s largest REIT, has acquired a 1.4M SF portfolio of seven industrial properties in the Chicago area for an estimated $99M.

The deal is the second major US acquisition for Ascendas in the past year. Last fall, the REIT acquired a 2.1M SF portfolio in Kansas City for $156M.

Ascendas is an established logistics real estate player in Singapore, Australia and the UK. The REIT said its US growth strategy involves buying well-located, highly occupied last-mile assets.

The properties in the newly acquired Chicago portfolio range in size from a 579K SF warehouse in Rochelle to a 43K SF building in Aurora, and include properties in the Chicago suburbs of Roselle, Glendale Heights, Bensenville, Alsip and Broadview.

The Ascendas REIT purchased the Chicago-area portfolio from BREIT Industrial HS Property Owner LLC, BREIT Industrial Canyon, BCORE Jupiter and Icon Pac Owner, third-party vendors.

Ascendas said all of the properties in the acquisition are sited in infill industrial submarkets of the thriving Chicago industrial logistics hub, which had a vacancy rate in 1Q 2022 of 3% and positive net absorption exceeding 8.1M SF.

Ascendas CEO William Tay said the portfolio is 100% occupied by 12 tenants with a weighted average lease expiry of five years. Tay estimated the value of the REITs US portfolio at nearly $1.7B, including property in San Francisco, San Diego, Raleigh and Portland, OR.

In November, Ascendas debuted in the US logistics market with its acquisition of 13 buildings in metro Kansas City. The infill properties in the KC area are situated across the submarkets of South Johnson County, North Johnson County, Eastern Jackson County and Northland.

At the time of the KC portfolio acquisition, the properties were 92.6% occupied by 27 tenants.

The Ascendas REIT has a market cap of S$12.1B, holding more than 210 properties with strong positions in logistics, data centers and business/science parks, according to analysts drwealth.

In March 2021, the Singaporean REIT entered the surging data center market in a big way, paying more than $300M for a portfolio of 11 European data centers that it purchased from Digital Realty Trust.

“Ascenda’s tenants are well-diversified across industries, with the largest sector (data centers) taking up only 11.7% of its portfolio. Given such diversification, no single property of Ascendas accounts for more than 4.3% of its monthly gross revenue. This reduces any tenant concentration risk,” the analyst said.