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MLT buys warehouse in South Korea for 21.4 billion won
MAPLETREE Logistics Trust (MLT) has agreed to acquire Smart Logistics Centre for a purchase consideration of 21.4 billion won (S$25.2 million) from Smart Logis Asset Development. The acquisition is in line with the manager's investment strategy to rebalance MLT's portfolio towards the higher growth markets and to expand MLT's presence in South Korea, said Mapletree Logistics Trust Management on Friday night.
Completed in December 2013, the property is a three-storey Grade A dry warehouse with a gross floor area of about 19,300 sq m. The property is located within Fashion Forest in Gyeonggi province, about 40 kilometres from Seoul. Fashion Forest is Korea's first and largest fashion distribution park with warehouses, hotels and an outlet mall sited on the 800,000-square-metre development catering to Korea's fashion industry.
The warehouse is fully leased to Smart Logistics and Smart Global, two established Korean logistics operators whose customers are mainly in the fashion and apparel industry. Both are related companies of the seller. The leases with Smart Logistics and Smart Global have a weighted average lease term to expiry of 4.7 years with built-in annual rental escalations.
Ng Kiat, chief executive officer of MLTM, said: "With its modern specifications and good location in Korea's first and largest fashion distribution park, this acquisition will strengthen our market position to 10 properties in Gyeonggi-do, South Korea's prime logistics hub."
The acquisition will be funded by debt and is expected to be completed by December 2014. Upon completion, MLT's aggregate leverage ratio will be approximately 35.5 per cent while MLT's total portfolio will increase to 117 properties with a book value of approximately S$4.4 billion.