SINGAPORE - Mapletree Logistics Trust (MLT) will snag three Grade A warehouses – one in Malaysia and two in Vietnam – for RM558.8 million (S$157.9 million) and 1.3 trillion Vietnamese dong (S$68.4 million) respectively, its manager announced on Feb 29.
The manager said the agreed value of the Malaysia logistics property in Kuala Lumpur represents a discount of some 0.2 per cent to the independent valuation obtained by HSBC Institutional Trust Services (Singapore), as MLT’s trustee.
And if the independent valuation obtained by the manager is considered, the discount deepens to 1.1 per cent.
The warehouse – situated in Shah Alam, one of the country’s major industrial regions that is “highly sought after” by third-party logistics companies and end users for domestic distribution and last-mile delivery – is expected to generate an initial net property income (NPI) yield of some 5.7 per cent, the manager said.
Meanwhile, the Vietnam properties – located in Ho Chi Minh City and Hanoi – are expected to generate an initial NPI yield of about 7.5 per cent.
The price of the Vietnam properties represents a discount of 3.2 per cent and 2.9 per cent to the valuations obtained by the trustee and manager respectively.
These warehouses are at Binh Duong province’s Mapletree Logistics Park 3, an established hub for industrial and logistics players, and Hung Yen province’s Hung Yen Logistics Park I, which is attractive for export distribution and as a fulfilment centre for e-commerce delivery to Hanoi, the manager said.
The total acquisition cost, including acquisition-related expenses, is estimated to top $234 million.
The manager intends to finance the acquisitions through a mix of debt and part of the sale proceeds from divestments in recent quarters.
MLT’s aggregate leverage is expected to increase from 38.8 per cent, as at Dec 31, to 39.6 per cent on a pro forma basis after financing the acquisitions, it disclosed.
Ms Ng Kiat, chief executive officer of the manager, noted that the purchase follows the completion of more than $200 million in divestments in the year to date.
Pointing out that the new properties are strategically located in logistics hubs serving growing consumption bases in the respective countries, she said the acquisitions position MLT’s portfolio to capture emerging Asia’s growth potential.
In a statement, the manager added that modern, Grade A warehouses – such as the ones that MLT is purchasing – account for a minority of total warehouse supply by floor area in Malaysia, at 39 per cent; and Vietnam, at 30 per cent.
MLT’s acquisitions thus position it to meet the evolving demands of tenants, while capturing the rent premiums commanded by modern warehouses over traditional ones, the manager said.
They will increase MLT’s exposure in Malaysia and Vietnam from 24 assets to 27 assets; gross floor area in Malaysia will increase by 20.6 per cent to 775,572 sq m, while that in Vietnam will rise 21 per cent to 703,941 sq m.
In Asia, Malaysia and Vietnam have been key beneficiaries of the structural shift in supply chains, which are reshaped by the ongoing impact of the United States-China trade war, pandemic disruptions and rising political pressures to deglobalise, the manager said.
These countries benefit, in part, due to their competitive labour costs, skilled workforces and supportive government policies, it added.
MLT units closed two cents lower at $1.46 on March 1. THE BUSINESS TIMES
