CapitaLand Ascendas REIT (CLAR) announced the signing of a full building lease agreement with Crinetics Pharmaceuticals Inc., for its new global headquarters at 6055 Lusk Boulevard, San Diego, United States. Under the agreement, CLAR will undertake a convert-to-suit exercise and transform the office property into a premier life sciences property at an estimated cost of USD 40.0 million (approximately SGD 56.4 million1). When completed in fourth quarter 2023, the redeveloped two-storey, 94,230 sq ft property will be a cutting-edge, high-performance and LEED Gold-certified life sciences building that exceeds the extensive requirements of today's life science tenants.

The building will be outfitted with new mechanical, electrical and plumbing (MEP) systems, roof, windows and interior improvements, which include laboratories, office and vivarium spaces. The energy efficient building will have solar panels as well as extensive indoor and outdoor spa- like amenities to improve employee well-being. The property is located in Sorrento Mesa, one of the top life science submarkets within the United States.

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 2 pick-up of approximately 9% when completed. The triple-net lease commitment of 11.5 years, with an option to extend two additional five-year terms, by Crinetics Pharmaceuticals will provide CLAR with a stable income stream. The company is confident that Crinetics' new global headquarters at 6055 Lusk Boulevard will be a standout in the Sorrento Mesa area, featuring comprehensive cutting-edge office and laboratory facilities as well as LEED Gold certification.

This venture will solidify and enlarge CapitaLand Ascendas REIT's track record in the life sciences space and foster even more opportunities for us. At the same time, returns will be boosted based on a higher and more attractive property yield of approximately 9%. After the completion of the project in fourth quarter of 2023, the proportion of life sciences properties is estimated to increase to SGD 1.3 billion or about 8% of assets under management, on a pro forma basis.