CapitaLand Ascendas REIT To Convert California Office Bldg Into Life Science Property
USA – CapitaLand Ascendas REIT, formerly known as Ascendas REIT, intends to transform a 94,230 sq ft office building in San Diego, California into a life science asset after fully leasing the property to a US pharmaceutical firm, reported Mingtiandi on Monday evening (3 October, SGT).
For this purpose, the Singapore-listed real estate investment trust (REIT) plans to invest US$40 million to install hi-tech laboratories, offices, and vivarium spaces, as well as new mechanical, electrical and plumbing systems in the building. It will also add solar panels and spa-like amenities for the tenant’s staff.
The two-storey building at 6055 Lusk Boulevard will function as the global headquarters of Crinetics Pharmaceuticals, a NASDAQ-listed manufacturer of drugs used to treat rare endocrine diseases and related tumours.
The life science building is located within the CareFusion campus in San Diego’s Sorrento Valley, which is a hub for tech and life science companies. Moreover, Crinetics’ existing offices are just a short drive at 10222 Barnes Canyon Road.
The conversion to a life science building with LEED Gold certification will allow the property to charge a higher base rent with a yearly escalation of 3 percent, It will also increase net property income (NPI) yield to 9 percent after the conversion is completed by Q4 2023.
The Singapore-listed REIT acquired the office building in 2019 as part of a US$937.6 million portfolio of 28 US business parks purchased from CapitaLand’s wholly-owned subsidiaries. The rental transaction with Crinetics also includes a triple-net lease commitment of 11.5 years, with an option to extend for 2 additional 5-year terms.
The asset’s conversion from office building to life science property will increase the percentage of CapitaLand Ascendas REIT life science properties to S$1.3 billion, or around 8 percent of assets under management (AUM). At present, the trust’s life science portfolio comprises seven properties in Singapore, including the 497,012 sq ft Nucleos biomedical research facility at one-north.
Last week, Ascendas REIT was renamed as CapitaLand Ascendas REIT. Also rebranded were Ascott Residence Trust and Ascendas India Trust, which were respectively rechristened as CapitaLand Ascott Trust and Ascendas India Trust.