Mapletree Logistics to acquire South Korean logistics facility for around S$154M

Mapletree Logistics Trust entered a deal to acquire the Yeoju Logistics Centre in South Korea in October 2021. Credit: Mapletree Logistics TrustMapletree Logistics Trust entered a deal to acquire the Yeoju Logistics Centre in South Korea in October 2021. Credit: Mapletree Logistics Trust

Mapletree Logistics Trust plans to acquire the Yeoju Logistics Centre in South Korea for 135 billion won, or around S$153.8 million, the trust said in a filing to SGX Wednesday.

The property’s independent valuation, performed by MatePlus Appraisal, came in at 139.6 billion won on 2 September, the filing said.

Yeoju Logistics Centre is projected to generate a net property income yield of 4.2 percent based on the purchase price, and it’s expected to be accretive to distribution per unit (DPU), Mapletree Logistics Trust said.

Ng Kiat, CEO of the trust’s manager, noted the Covid-19 pandemic has accelerated e-commerce growth and boosted demand for modern logistics space.

“With its high specifications and strategic location, this two-year-old facility will position us well to capture the market growth. This acquisition will expand MLT’s network presence in the Seoul Metropolitan Area to 19 assets,” she said in the statement.

The property, which is ramp-up logistics asset, is located in northern Yeoju, a newly established logistics hub with connectivity to Seoul, the trust said. Yeoju Logistics Centre has two blocks of three-storey dry warehouses, with direct ramp access to upper floors, the filing said.

South Korea’s e-commerce market ranks among the most developed globally, with a projected compound annual growth rate of 20 percent from 2021 to 2025, the trust said, citing data from Research and Markets.

“The Covid-19 pandemic has contributed to this growth, providing a new source of demand for high quality warehousing facilities in prime locations. With its modern specifications and strategic location with excellent connectivity, the property is in a favourable position to attract users from the e-commerce sector,” Mapletree Logistics Trust said.

The site is already fully leased to a South Korean online fashion platform and to a domestic third-party logistics service provider, the filing said.

The deal is expected to be completed in the fourth quarter, the trust said.

Once the deal is complete, Mapletree Logistics Trust’s portfolio will include 167 properties, with S$11.1 billion in assets under management.