MapleTree – SGX
MAPLETREELOG EXPANDS JAPAN PORTFOLIO WITH ACQUISITION OF DISTRIBUTION CENTRE
Singapore, 20 September 2007 – Mapletree Logistics Trust Management Ltd. (“MLTM”), Manager of Mapletree Logistics Trust (“MapletreeLog”), is pleased to announce that MapletreeLog, through its wholly-owned subsidiary, has executed a conditional agreement to eventually acquire the beneficiary interest of a distribution centre currently under construction, when completed in Japan for a total consideration of about S$92 million1.
The property is located in the Kanto region. Completion of the acquisition is expected to be sometime in 2008.
The deal will be accretive to MapletreeLog’s distribution per unit (“DPU”) and the pro forma financial effect of the acquisition on the DPU for the financial year ended 31 December 2006 would be an additional 0.16 Singapore cents per unit2.
Benefits and rationale of the Acquisition
Mr. Chua Tiow Chye, Chief Executive Officer of MLTM, said, “We are very pleased with this acquisition, our 7th property in Japan. This property is located in one of the key logistics zones in the Kanto region and will be leased to a tenant from a leading Japanese manufacturing group. With a lease tenure of 20 years, this will bolster our core base of long leases with stable yield and recurrent rental income. This will complement the shorter term leases in our portfolio in higher growth markets such as China, Malaysia and Hong Kong. ”
In its “Asia Pacific Investment Market Review, 1H2007”, CB Richard Ellis highlights investors’ positive outlook on the Japanese real estate market, with demand for high-specification logistics space remaining strong in major regional cities. The Bank of Japan’s latest Tankan corporate surveys showed that corporate capital spending by major firms have stayed firm.
CBRE notes that substantial demand for industrial properties was observed from local investors, end-users and foreign funds, fuelled by robust re-export activities, optimism over the local economy and the sector’s higher yields relative to other real estate sectors. There is a shortage of quality industrial premises that meet the stringent investment criteria of institutional buyers, especially those of larger-scale.
Funding
Given the relative lower cost of borrowing in Japanese yen, the Manager intends to fund the acquisition wholly by debt.
General Description of the property
The property is a build-to-suit facility, with high specifications catering specifically to the tenant’s needs. Construction of the distribution centre is targeted to be completed sometime in 2008. It is located within one of the key logistics nodes in the Kanto region. The property is easily accessible via major roads and expressways.
1 Purchase consideration of JPY6.9bn, based on an exchange rate of S$1.00 to JPY 75.25
2 Assuming that MapletreeLog had purchased, held and operated the subject properties for the whole of the financial year ended 31 December 2006 (based on 41 properties) and that the acquisition is fully funded by debt
Source : SGX