Correction: This article has been updated to correct the spelling of Shopee.
Mapletree Logistics Trust entered a deal to acquire seven modern logistics properties across Malaysia, Vietnam and China for a total of around S$383.9 million, the trust said in a filing to SGX Monday.
“This portfolio of seven modern logistics properties offers good diversification across three attractive markets – Malaysia, Vietnam and China.
Vietnam and Malaysia have benefited from supply chain shifts to Southeast Asia, a trend that will likely accelerate in response to the ongoing trade conflict,” Ng Kian, CEO of the REIT’s manager, said in the statement.
“The Tier 2 cities in China continue to see growth in urbanisation and domestic consumption. With their strategic locations and high specifications, the properties are well-placed to tap into these trends and capture growth opportunities,” she added.
Including acquisition-related expenses, the total cost is expected to be around S$422 million, the trust said, adding it plans to finance the deal with a combination of equity and/or debt.
Under the deal, the Malaysia logistics property would be acquired for around 826 million ringgit, or around S$269.9 million, the filing said. The property is located in Shah Alam, the prime logistics hub serving Malaysia’s Klang Valley, the country’s largest and most-affluent consumer market, Mapletree Logistics Trust said.
Two logistics properties in Vietnam will be acquired for around US$38.9 million, or S$53.3 million, via property holding companies, the filing said. The properties are loated in the Bac Ninh and Binh Duong provinces, servicing Hanoi and Ho Chi Minh City respectively, marking the largest consumption markets in northern and southern Vietnam, the trust said.
The trust will also acquire a 50 percent interest in four logistics properties in China for around 314.3 million yuan, or around S$60.7 million, via the acquisition of property holding companies, the filing said. The properties are located in Chengdu, Shenyang, Jinan and Changsha, which are capitals of their respective provinces and fast-growing, densely populated cities, the filing said.
The remaining 50 percent interest in the China properties is held by subsidiaries of the trust’s sponsor, Mapletree Investments, the filing said.
Mapletree Logistics Trust said the acquisitions will increase its scale and enhance its network and competitive positioning, and would bring its footprint to a total of 45 cities.
The properties are 100 percent leased with a strong and diversified tenant base catering mainly to consumer markets, the trust said, adding tenants include Watsons, Ashley Furniture and Southeast Asian e-commerce players Lazada eLogistics and Shopee. E-commerce companies account for around 45 percent of the properties’ gross revenue, the filing said.
On a pro forma basis, assuming the acquisition was completed on 1 April 2018, the distributable income to shareholders would be S$285.90 million, compared with S$270.03 million reported for the fiscal year, while the pro forma distribution per unit would be 8.019 Singapore cents, compared with 7.941 Singapore cents reported, the filing said. That assumes around 162.3 million new units issued at S$1.53 a unit in an equity fund raising and 1.25 million new units issued to pay the manager’s acquisition fee, the filing said.