Mapletree Logistics Trust to acquire logistics assets worth S$1.4b in China, Vietnam and Japan

Published Tue, Nov 23, 2021 · 08:42 AM

MAPLETREE Logistics Trust (MLT) M44U : M44U 0%is acquiring a portfolio of 17 grade-A logistics assets with an average age of 1.6 years in China, Vietnam and Japan for a combined total value of S$1.4 billion. The acquisitions are expected to be accretive to distribution per unit (DPU) and net asset value (NAV) per unit on a historical pro forma basis.

In a bourse filing late on Monday (Nov 22), the trust’s manager said it intends to buy 13 properties in China at an agreed property value of S$870 million and another 3 properties in Vietnam at a value of S$129.9 million.

The China properties are being acquired from MLT sponsor Mapletree Investments as well as Itochu Corporation, at a discount of 1.2 per cent to valuations done by independent property valuers. The Vietnam properties are being acquired from Mapletree Investments at a 0.5 per cent discount.

Separately, the manager also announced the proposed acquisition of an effective 97 per cent interest in Kuwana Logistics Centre located in Japan. The acquisition is from an unrelated third party vendor at an agreed property value of S$416.3 million. The remaining 3 per cent effective interest in the property will be held by Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly owned subsidiary of MLT.

Payment for the 13 new assets in China will consist of 1.15 billion yuan (S$243.6 million) in cash, with the remaining amount to be settled partly through the issue of new units and partly through the transfers of some loans.

For the Vietnam properties, US$14.4 million will be satisfied in cash, while the rest will be an undertaking of inter-company loans. The new Japanese property, which comes at a discount of about 1.7 per cent to the independent valuation, will be paid for fully in cash.

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Assuming the properties had been held for the full year ended Mar 31, 2021, they would have added 2.2 per cent to DPU. NAV would have been up 4.4 per cent as at end-March, while leverage levels would have been stable.

MLT on Nov 23 also proposed to issue new units to raise gross proceeds of about S$700 million. Some S$675.5 million of the amount will be used to fund the acquisitions, while S$24.5 million will be used to pay for fees and expenses in connection with the acquisitions and equity fundraising.

The fundraising includes a private placement of between 209.3 million and 215.1 million new units at an issue price of between S$1.86 and S$1.911 per new unit , to raise gross proceeds of approximately S$400 million. This represents a volume- weighted average price (VWAP) discount of 1.2 per cent and 3.8 per cent to the adjusted VWAP of S$1.9339 per unit respectively.

A non-renounceable preferential offering of up to 163.4 new units to existing eligible unitholders at an issue price of between S$1.82 and S$1.87 per new unit is also proposed to raise gross proceeds of about S$300 million. This represents a 1.9 per cent and a 4.5 per cent discount respectively to the VWAP of S$1.9485 per unit of all trades on the Singapore Exchange for the preceding market day on Nov 22.

DBS, HSBC Singapore and OCBC have been appointed as the joint global coordinators and bookrunners for the fundraising.

The China acquisitions will deepen MLT’s presence in the country, where it will now have 43 assets in 29 cities. The scarcity of grade-A warehouses in the China market as well as the location of the properties in close proximity to large population catchments bring key benefits to unitholders, the manager noted.

"The enlarged portfolio allows MLT to offer tenants a multi-city network of warehouse facilities, positioning MLT to be the preferred partner for fast-growing tenants looking to build presence across the country," the manager said.

Vietnam is also a beneficiary of the structural trend of supply chain diversification, with competitive costs and an attractive investment environment.

The manager added: "With rising consumption, an expanding middle-income urban population and strong e-commerce adoption rate, demand for quality logistics space is expected to remain robust, while supply of Grade-A logistics space remains limited."

Meanwhile, the Japan Property to be acquired is a freehold, 5-storey dry logistics facility with a gross floor area of over 1.7 million square feet. It is located within an established industrial and logistics cluster in Greater Nagoya, and is in close proximity to Nagoya City, Nagoya Port and Centrair Airport, as well as the ShinMeishin Expressway.

Ng said the acquisitions in China and Vietnam will expand MLT's network connectivity in those large growing consumer markets while the acquisition in Japan will scale up MLT's presence in Greater Nagoya, an attractive logistics market strategically located between Greater Tokyo and Greater Osaka.

"The pandemic has highlighted the importance of logistics and placed a greater emphasis on supply chain resiliency, fuelling demand for modern logistics space," she added.

The trust requested for a trading halt on Tuesday (Nov 23) morning. Units of MLT closed 0.5 per cent or S$0.01 lower at S$1.95 on Nov 22.

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