The manager of Mapletree Industrial Trust (MINT) announced on September 14 that the trust has entered into a sale, purchase and escrow agreement (sale and purchase agreement) to acquire a data centre and office located in Virginia, US.
According to a statement, additional details will be released once the purchase consideration is finalised, due to confidentiality reasons.
The target completion for the proposed acquisition is expected to happen in the first quarter of 2021.
Under the agreement, the purchase consideration stands at between US$200.6 million ($272.8 million) and US$262.1 million ($356.5 million), subject to calibration of terms.
The total acquisition cost is estimated to be around US$204.3 million and US$266.9 million, including other fees and expenses.
The property, which is sited on freehold land, is fully leased on a triple net basis with a balance lease term of more than five years to a multinational company (MNC) with “strong credit standing”.
According to independent property valuer Cushman & Wakefield, the property is valued between US$205 million and US$266 million as at August 31, 2.2% and 1.5% higher than the purchase considerations respectively.
Cushman & Wakefield says it had arrived at its market valuations of the property using the income capitalisation against the sales comparison method. Based on its valuations, the value attached to the data centre is more than 50% of the total valuation.
The manager says the proposed acquisition is in line with the its long-term strategy of focusing on “property segments with future growth potential”.
Following the completion of the acquisition, MINT’s assets under management (AUM) will increase from $6.6 billion as at June 30 to $6.9 billion.
Data centres in North America are expected to account for 34.7% of MINT’s portfolio by AUM, up from 32.0% as at June 30.
Its portfolio weighted average lease to expiry will increase from 4.2 years as at June 30 to 4.3 years.
The tenant will also become the fifth largest tenant in MINT’s portfolio with a gross rental income (GRI) contribution of 2.7%, and reduce the exposure to any single tenant to 7.2% from 7.4% as at June 30.
The property is also expected to be accretive to MINT’s distribution per unit (DPU), even at US$266.0 million at the total acquisition outlay.
Units in MINT closed 1 cent higher, or 0.3% up, at $3.12 on September 11.
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