Mapletree North Asia Commercial Trust to buy building housing HP Japan HQ for 38.8b yen

MAPLETREE North Asia Commercial Trust has entered into an agreement to buy almost the entire stake in a freehold single-tenanted office building in Tokyo, now used as Hewlett-Packard Japan headquarters.

Mapletree North Asia Commercial Trust Management, manager of the real estate investment trust (Reit), announced in a regulatory filing on Friday the purchase of an effective interest of 98.47 per cent in the building for 38.8 billion yen (S$467.3 million) from an unrelated third-party vendor.

The balance effective interest of 1.53 per cent in the property will be held by Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly-owned subsidiary of Mapletree Investments, the Reit's sponsor.

The property is 100 per cent leased to Hewlett-Packard Japan and has a lease expiry of 8.8 years.

The Reit manager stated the acquisition is expected to provide a stable income stream for the Reit, as well as be accretive in terms of distribution per unit.

The assets under management of the enlarged portfolio will stand at S$8.4 billion, or an increase of 6 per cent from that of the existing portfolio of S$7.9 billion.

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Contribution from Japan will increase from 16.6 per cent to 21.3 per cent by assets under management, or increase from 22.4 per cent to 26.7 per cent by net property income.

The manager intends to finance the purchase and relevant costs through a combination of debt financing and the issuance of perpetual securities. Aggregate leverage post acquisition is expected to be 41.9 per cent, up marginally from 41.5 per cent now.

Completion is subject to the conditions being fulfilled and is expected to take place by June 30.

The Reit rose 0.98 per cent to S$1.03 on Friday, before this announcement was made.