Mapletree Logistics Trust (MLT) has acquired the interests in a portfolio of five modern, freehold logistics properties based in South Korea.
The interests were acquired – through five sale and purchase agreements on Feb 15 – at a consideration of 280.0 billion won ($334.8 million), which will be satisfied fully in cash.
The properties consist of five purpose-built dry storage, high specifications logistics warehouses located within Yongin-Icheon, an established logistics cluster in the Seoul Metropolitan Area of South Korea.
They come with a total gross floor area (GFA) of approximately 149,897 sqm on a combined freehold land area of 148,818 sqm.
As at Feb 1, the properties have an overall occupancy rate of 100% with a weighted average lease expiry (WALE) of 1.7 years by net lettable area (NKA).
The properties are being acquired from Kookmin Bank in its capacities as trustee of Mirae Asset MAPS Logistics Private Qualified Investor Real Estate Investment Trust No. 3, and as trustee of Mirae Asset MAPS Logistics Private Qualified Investor Real Estate Investment Trust No. 4.
Three of the properties – AbleLogis, Bukuk and Dongsan – have been acquired by Shinhan Bank as the trustee of IGIS Professional Investment Type Private Placement Real Estate Investment Trust No. 404 (the REF).
SEE: Mapletree Logistics Trust: REIT that offers price stability, stable DPU in a volatile year
The trust, through its direct, wholly-owned subsidiary, Yeongdong (Korea) has proposed to subscribe for approximately 99.9% of the units in the REF, with the remaining 0.1% units to be subscribed by Icheon REF, an indirect wholly-owned subsidiary of Mapletree Investments, upon the completion of the acquisitions.
A unitholders’ agreement will also be entered into between Yeongdong (Korea) and Icheon REF to regulate their relationship as unitholders of the REF.
The acquisitions are expected to be accretive to MLT’s distribution per unit (DPU); they are expected to generate an initial net property income yield of approximately 4.5% based on the agreed property value of 280 billion won.
The total acquisition cost payable by MLT is expected to be 100% funded by debt. Following the completion of the acquisitions, MLT’s aggregate leverage ratio is estimated to increase to 38.9%.
MLT’s total portfolio post-acquisition will increase to 161 properties with assets under management (AUM) of $10.5 billion.
According to the manager of the trust, the acquisitions are in line with its strategy to “rejuvenate” the trust’s portfolio through the addition of modern logistics facilities.
It adds in a statement dated Feb 15 that the properties are well-positioned to attract users from high-value industries and the e-commerce sector.
“This is an attractive strategic opportunity for MLT to acquire a portfolio of high specifications warehouses that will significantly scale up our competitive positioning. The acquisitions will increase our gross floor area in South Korea by 40%, enabling us to better cater to the current and future needs of our customers and capture growth opportunities in the logistics market,” says Ng Kiat, CEO of the manager.
Units in MLT closed 2 cents higher or 1.0% up at $1.95 on Feb 15.
