Mapletree Industrial Trust’s (MIT) manager announced on May 25, the proposed acquisition of a 98.47% interest in a newly built data centre in Osaka for JPY51.2 billion ($500.1 million). The manager intends to finance the acquisition with a combination of debt and proceeds from an equity fund raising (EFR). The proposed acquisition is expected to be distribution per unit (DPU) and net asset value (NAV) per unit accretive to MIT Unitholders.
The data centre has a 70 year lease, comprises of 136,900 sq ft of net lettable area, and more than 10 MW of IT power. The occupancy is 100% with a weighted average lease expiry of 20 years.
The acquisition increases MIT’s exposure to data centres from 53.7% to 56.3%, with Asia-Pacific footrprint rising to 8.7% from 3.4% (based on end-March metrics). According to a presentation the acquisition 2.1% DPU accretive and 0.5% NAV per unit accretive, based on number of units in issue as at March 31, plus approximately 91.5 million new units issued from a private placement to raise $195.7 million and approximately 0.8 million new units for fees. The pro forma aggregate leverage would rise from 37.4% as at March 31 to 38.7%.
Separately, MIT's placement comprises 200 million units, priced between $2.16 and $2.212, at a discount of 1.5% to 3.8% to adjusted VWAP on May 24 May.
In an update, Goldman Sachs says the proposed property acquisition is within previous management guidance of portfolio rebalancing through a combination of acquisition, divestment and/or development, despite Japan being a new geography.
"Financially, we note that the pro forma DPU accretion of +2.1% is higher than recent CapitaLand Ascendas REIT's proposed transactions' accretion of +1.2-1.3%. This is partly driven by slightly higher gearing, and refinancing with lower cost JPY loans, without which the transaction would still be accretive at around +0.4-0.5% (according to management)," Goldman Sachs adds.
