Mapletree Logistics Trust unit enters new agreement to acquire logistics facility in Malaysia

Mapletree Logistics Trust (MLT) has entered into a new sale and purchase agreement to acquire Mapletree Logistics Hub - Tanjung Pelepas for RM404.8 million (S$130.2 million) after an agreement lapsed.

In a filing to the Singapore Exchange on Friday, it said that the new conditional sale and purchase agreement had been entered into by Semangkuk 2, a bankruptcy-remote special purpose vehicle incorporated in Malaysia, with Trinity Bliss. Trinity Bliss is a company indirectly owned by Mapletree Investments (MIPL) and Itochu Corporation, with MIPL holding 80 per cent and Itochu the rest.

As such, Trinity Bliss is a subsidiary of MIPL, which is also considered a controlling unitholder of MLT.

The trust's manager intends to finance the total acquisition cost through a combination of the proceeds from an equity fund raising carried out in October 2020 and November 2020, a drawdown of debt facilities and the issuance of senior asset-backed securitisation medium term notes.

The RM404.8 million price tag represents a discount of about 0.05 per cent and 1.27 per cent to two independent valuations carried out by Knight Frank Malaysia and First Pacific Valuers Property Consultants respectively.

The total acquisition cost works out to S$132.2 million, when taking into account the acquisition fee payable - or 0.5 per cent of the acquisition price - in units of MLT to the trust's manager as well as other fees and expenses arising from the acquisition.

In June, MLT had announced that the sale and purchase agreement relating to the proposed acquisition of the property in Malaysia had lapsed, as the pandemic had resulted in taking a longer time than expected for the vendor to obtain written approvals of the Johor Port Authority and Pelabuhan Tanjung Pelepas, the sub-lessor of the property.

After the acquisition, MLT's aggregate leverage ratio will increase from 38.2 per cent to 39 per cent.

The trust's manager said that the acquisition of the modern Grade A logistics facility will benefit unitholders by strengthening MLT's network connectivity as well as allowing it to establish a presence in Malaysia's port of Tanjung Pelepas, which is a regional distribution hub.

The property comprises a block of single-storey warehouse with mezzanine floor offices, and two blocks of double-storey ramp-up warehouses with mezzanine floor offices as well as other ancillary buildings, for a total net lettable area of 131,986 square metres. As at June 30, 2021, it had a committed occupancy rate of 95 per cent, while its leases had a weighted average lease expiry by net lettable area of about 3.5 years, with built-in annual rental escalations.

The acquisition is expected to be accretive, with an initial net property income yield of 5.4 per cent, based on the acquisition price.

Units in MLT closed at S$2.09 on Friday, up two cents or about 1 per cent.