Mapletree Logistics Trust plans to acquire a cold storage facility in Melbourne, Australia, for A$42.8 million, or around S$42.8 million, the trust said in a filing to SGX Friday.
At the purchase price, the initial net property income yield is estimated at 4.3 percent, will be accretive at the distribution level, the filing said.
The deal will be fully funded by debt, with completion expected by the end of the year, the filing said.
“The property is located within the inner west precinct of Melbourne, an established industrial and logistics region in the vicinity of MLT’s existing four properties,” Mapletree Logistics Trust said. “With excellent connectivity to major arterial routes and its close proximity to the city center (around 13km) and the Port of Melbourne (around 10km), the inner west precinct is a location of choice for users from the logistics, light manufacturing and food distribution industries.”
The facility is fully leased to Austco Polar Cold Storage, a subsidiary of ASX-listed red-meat exporter Wingara AG, for the storage, packaging and export of red meat products, the trust said.
The lease extends for 13 years, with annual rent escalations, and will provide Mapletree Logistics Trust with a stable and growing income stream, the filing said.
The trust said Australia has a relatively low supply of cold storage facilities, compared with other developed markets, despite the e-commerce, food and grocery sectors posting strong growth in 2020, increasing demand. There are no vacant cold storage warehouses of greater than 5,000 square meters in Australia, the trust said, citing Colliers data.
The property is valued at A$43 million by Knight Frank as of 21 June, the filing said.
The acquisition would bring to five the number of logistics assets the trust holds in Melbourne, and a total of 13 assets in Australia, with over A$870 million in assets under management, the filing said.
Mapletree Logistics Trust’s portfolio had 163 logistics assets as of end-June, located across Singapore, Hong Kong, Japan, Australia, China, Malaysia, South Korea, Vietnam and India, with assets under management of S$10.7 billion.