CapitaLand Ascendas REIT (CLAR) has secured a full building, triple net lease agreement for its asset at 6055 Lusk Boulevard in San Diego, USA.
The lease has been secured with Crinetics Pharmaceuticals, and the asset will be the company’s new global headquarters.
Crinetics Pharmaceuticals is listed on the NASDAQ and it develops novel therapeutics for rare endocrine diseases and endocrine-related tumours.
The lease is for 11.5 years, with an option for Crinetics Pharmaceuticals to extend it with two additional five-year terms.
Under the agreement, CapitaLand Ascendas REIT will undertake a convert-to-suit exercise and transform the office asset into a life sciences facility at an estimated cost of USD40.0 million.
The asset will receive new mechanical, electrical and plumbing (MEP) systems, roof, windows and interior improvements that include laboratories, office and vivarium spaces.
The asset will also be installed with solar panels as well as extensive indoor and outdoor spa- like amenities to improve employee well-being, said the REIT.
When completed in 4Q 2023, the 94,230 square feet asset will be a LEED Gold-certified life sciences facility.
“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”, said the REIT.
“This venture will solidify and enlarge CapitaLand Ascendas REIT’s track record in the life sciences space and foster even more opportunities for us”, said William Tay, CEO of the REIT’s manager.
“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 SGD1.3 billion or about 8% of our assets under management, on a pro forma basis”, he added.
CapitaLand Ascendas REIT was last done on the Singapore Exchange at SGD2.69, which presently implies a distribution yield of 5.85% according to data on the Singapore REITs table.