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Mapletree Logistics Trust to acquire Gyeonggi-do logistics property for 37.85b won

MAPLETREE Logistics Trust (MLT) plans to acquire Wonjin Logistics Centre in South Korea from Wonjin Logistics for 37.85 billion won (S$46.4 million).

The acquisition is expected to be accretive, with an initial net property income yield of about 6.5 per cent based on the purchase price of 37.85 billion won, MLT said on Thursday evening.

The property comprises two blocks of multi-tenanted dry warehouses with a total gross floor area (GFA) of about 29,325 square metres (sq m) and land area of 31,055 sq m. It is located in Gyeonggi-do, a province surrounding Seoul with 25 million inhabitants or over half of the country’s population, and also the largest logistics cluster in South Korea, MLT said.

The property has been valued at 40.9 billion won by CBRE Korea as at Oct 30, based on the direct capitalisation approach, discounted cash flow analysis, direct comparison approach and depreciated replacement cost approach.

MLT said: "Rising ecommerce growth and a growing third-party logistics market continue to drive demand for modern warehouse space in locations nearby Seoul. The country is also the fourth largest 3PL (third-party logistics) market in Asia Pacific and is growing at an annual rate of 7.8 per cent."

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The property is fully leased to three established 3PLs with a weighted average lease expiry of 4.3 years by net lettable area). Wonjin Logistics, which will leaseback over 60 per cent of the property’s GFA, is a prominent local 3PL and its major customers include well-known corporations such as Lotte, Amore Pacific and Carrier.

The remaining space is leased to one of the largest logistics companies in South Korea as well as a fast-growing 3PL in Asia, especially in the fashion industry, MLT said.

Ng Kiat, chief executive of the trust manager, said: “Following this acquisition, MLT will have 11 properties in Gyeonggi-do serving the Seoul metropolitan area and a total of 12 properties with over 350,000 sq m of leasable space in South Korea.”

The acquisition will be funded by debt, and is expected to be completed by the fourth quarter of MLT's current fiscal year (first quarter of the next calendar year), subject to satisfaction of relevant conditions.

MLT units closed unchanged at S$1.21 on Thursday.

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