Mapletree Logistics Trust to acquire Baeksa Logistics Centre in South Korea for 88.5b won

THE manager of Mapletree Logistics Trust (MLT) has announced a proposed acquisition of Baeksa Logistics Centre in South Korea for 88.5 billion won (S$100.3 million).

The real estate investment trust (Reit) will expand its presence in South Korea with the acquisition, it said in a bourse filing on Monday evening (Feb 28).

The property is located within the established Yongin-Icheon logistics hub that serves the Seoul Metropolitan Area. It is a 4-storey single-block dry logistics facility with a total gross floor area of over 41,100 sq m on 30,000 sq m of freehold land. It has been built with specifications such as strong floor loading of over 20 KiloNewtons per sq m, direct ramp access and spacious docking yards to facilitate logistics operations.

This acquisition will allow MLT to ride South Korea's mature e-commerce market, which has seen demand for warehousing facilities in prime locations. The property is fully leased to Howser, an e-commerce company specialising in furniture storage, delivery and installation. It is also a partner of e-commerce player Coupang to deliver furniture sold on its platform.

The property was independently valued by Chestertons Research at 91.5 billion won as at 21 Dec 2021, based on Market Comparison and Discounted Cash Flow methods. The acquisition is estimated to generate a net property income yield of 4 per cent, based on the property purchase price and is expected to be accretive to the Reit's distribution per unit.

The acquisition will be fully funded by debt, and MLT's gearing ratio will be approximately 39.6 per cent on a pro forma basis.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

"The logistics industry has benefitted from recent structural trends such as growing e-commerce and building supply chain resiliency. This acquisition, with its modern specifications and 100 per cent occupancy underpinned by a leading e-commerce company, is expected to be yield-accretive to MLT," said Ng Kiat, chief executive officer of Mapletree Logistics Trust Management.

MLT closed at S$1.75 on Monday, up S$0.01 or 0.58 per cent.