CapitaLand Ascendas REIT Acquires UK Warehouse Development Sites From DHL for $274M

With demand on the rise for large-scale logistics properties in the UK, CapitaLand Ascendas REIT (CLAR) announced on Monday that it has agreed to purchase development sites in the country’s Midlands area for GBP 203.5 million ($274 million).

The proposed purchase, which is the SGX-listed real estate investment trust’s first deal for logistics development projects in the UK, sets the REIT up to build up to 135,600 square metres (1.46 million square feet) of warehouses on the sites in Manton Wood and Towcester, once the purchase from express delivery firm DHL is complete. 

“Embarking on our inaugural logistics developments in the UK marks a significant step forward in our strategy to scale up CLAR’s UK logistics portfolio,” said William Tay, CEO and executive director of the trust’s manager. “With positive structural drivers such as e-commerce and onshoring anticipated to sustain demand, these four new properties are set to boost the asset value of CLAR’s UK logistics portfolio by 43.5 percent to approximately S$1.2 billion ($935 million).” 

With 38 UK logistics assets already in its portfolio, according to its website, CapitaLand Ascendas REIT announced its purchase of the development sites after investment in industrial and logistics properties in the UK jumped to GBP 3.2 billion in the first half of 2025, which marked a 27 percent increase from a year earlier, according to property consultancy JLL.

Building More High-Spec Space

CLAR’s manager highlighted the investment as a way to add more up-to-date facilities to its holdings in the country, with the new projects in line to boost the proportion of modern logistics assets in its UK portfolio to more than 70 percent, as measured by assets under management. 

The deal will also expand the REIT’s footprint in the East Midlands logistics hub, which encompasses Derby, Leicester, Nottingham and Northampton, with traffic arteries such as the M1, A1 and A5 connecting the region to points north and south. The nearby East Midlands Airport ranks as the UK’s second largest cargo airport and serves transport giants DHL, UPS and FedEx, as well as the Royal Mail.  A rendering of the future Manton Wood facility supplied by CLAR’s manager shows the project adjacent to a DHL warehouse.  

With data from Savills showing that the vacancy rate for facilities of 23,200 square metres or more in size was the lowest in the UK at the end of 2024 at 5.1 percent, CLAR’s manager sees the opportunity to build into an undersupplied market.

“In 2024, the East Midlands market accounted for the largest share (30 percent) of logistics take-up in the UK,” CLAR’s Tay pointed out. “It is one of the tightest supplied regions with availability equal to 1.2 years of average annual take-up, quicker than the UK national average of 1.5 years.”

At Manton Wood the Singaporean trust will develop a 42,900 square metre, single-storey warehouse, while the Towcester site is slated to yield, three single-storey logistics properties ranging from approximately 20,700 to 38,300 square metres in size.

By designing in features such as skylights, roof-mounted photovoltaics and electric vehicle charging points, CLAR aims to achieve “Excellent” certifications for the properties under the UK’s BREEAM regimen for sustainable buildings, which would bring seven of the trust’s 42 properties in line with the country’s green building standards. 

Across the REIT’s total portfolio, the deal will boost the percentage of green-certified properties to 51 percent from 49 percent, according to the announcement. .

“Adding these best-in-class and green-certified logistics properties enhances CLAR’s logistics portfolio in the East Midlands, a key market in the UK’s logistics heartlands, and capitalise on occupiers’ demand for high-quality and well-located space,” Tay added.

Portfolio Replenishment

The REIT managed by CapitaLand Investment announced its UK plan after agreeing to acquire a pair of US logistics properties late last year. 

In December CLAR agreed to buy a 91,012 square metre Indiana warehouse for $115.8 million, with DHL also acting as the vendor in that deal. A month earlier the trust had announced its acquisition of a logistics project in Summerville, South Carolina for $70.5 million.

In May, CapitaLand Ascendas REIT moved to expand its local presence with a deal to acquire the e-commerce player Shopee’s headquarters near National University of Singapore, as well as data centre in the Hougang area for a total of S$700.2 million.

The trust’s net property income dipped to S$523.4 million during the first six months of 2025, down 0.9 percent from a year earlier, with CLAR’s manager attributing the change primarily to the divestment of five properties across Australia, Singapore and the US since February 2024 and the decommissioning of the Welwyn Garden City data centre near London for redevelopment.