Mapletree Logistics Trust to acquire 2 prime land parcels in Malaysia for RM65.6m

MAPLETREE Logistics Trust M44U (MLT) on Tuesday (Feb 15) announced that it will acquire 2 parcels of leasehold industrial properties in Subang Jaya in the Malaysian state of Selangor for a total price of RM65.6 million (S$21.0 million).

Sitting on total land area of 257,000 square feet (sq ft), the property is located next to MLT's existing Subang 3 and 4 properties, and a 20-minute drive from MLT's other assets - Mapletree Shah Alam Logistics Park and Mapletree Logistics Hub - Shah Alam.

Ng Kiat, chief executive of MLT's manager, said this acquisition offers a "rare redevelopment opportunity" for the trust to amalgamate the property with its existing adjacent properties - Subang 3 and 4. "This is in line with our strategy to optimise MLT's portfolio and future-proof our assets through asset rejuvenation," she said.

If successfully amalgamated, the combined land parcel will come in at 492,000 sq ft, making it suitable for a redevelopment project that can yield a potential gross floor area of about 1.4 million sq ft, said MLT.

With the redevelopment, the plot ratio of MLT's Subang 3 and 4 properties will increase by 5 times, and the gross floor area will grow from 139,000 sq ft to 700,000 sq ft after the redevelopment.

MLT said the proposed redevelopment, with an estimated total investment cost of RM500 million, is poised to be the first mega modern logistics facility in Subang Jaya.

The acquisition of the property will be fully funded by debt and is expected to be completed by September, subject to regulatory approvals.

Transaction-related costs are estimated to come in at a maximum of RM4.0 million. These include the stamp duty, professional advisory fees and the acquisition fee payable to MLT's manager.

Upon completion, MLT's aggregate leverage ratio is estimated to be around 39.2 per cent on a pro forma basis.

The property is not expected to generate any income for the initial years before the completion of redevelopment, which is estimated to be by 2027.

The property was valued at RM67.9 million by First Pacific Valuers Property Consultants in Malaysia on Jan 24 based on the residual method.

MLT said Subang Jaya is a strategic and prime location for domestic distribution due to its proximity to the Kuala Lumpur city centre and the densely populated areas of Subang, Petaling Jaya, Damansara and Puchong.

Its strategic location makes it suitable as an alternative distribution centre location as well as last-mile delivery centre for e-commerce operators, added the trust.

Units of MLT closed on Tuesday at S$1.75, up 1.2 per cent or S$0.02.