Mapletree Logistics Trust to acquire Japan logistics property for around S$416M

Japanese 1,000 yen notesJapanese 1,000 yen notes

Mapletree Logistics Trust has entered a deal to acquire the Kuwana Logistics Centre in Japan for 35 billion yen, or around S$416.3 million, from an unrelated third party, the trust said in a filing to SGX late Monday.

An independent valuation of the property by JLL Morii Valuation & Advisory K.K. estimated the property’s market vlaue at 35.6 billion yen as of 11 November, the filing said.

The deal will be financed with a combination of debt financing and an equity fundraising, which may include a private placement of new units to institutional and other investors, and/or a non-renounceable preferential offering of new units to existing unitholders, the trust said.

On a pro forma basis, the deal is expected to have distribution per unit (DPU) accretion of 1.0 percent, the filing estimated.

The Kuwana Logistics Centre is a multi-tenanted, five-storey dry logistics facility located in a logistics and industrial cluster in Nagoya in close proximity to Nagoya City and Nagoya Port as well as Centrair Airport, the filing said. The property has modern specifications, including double ramp ways and large floorplates, the filing said.

The property, which has a committed occupancy of 82.5 percent, is leased to eight established and diverse tenants, Mapletree Logistics Trust said.

“The Japan acquisition will expand MLT’s presence with a third property in Greater Nagoya, a key regional distribution strategically located between Greater Tokyo and Greater Osaka. MLT’s existing two properties in Greater Nagoya are Toki Centre and Aichi Miyoshi Centre,” the trust said.

“The Japan acquisition will deepen MLT’s network connectivity in Japan and complement its existing platform of 18 logistics facilities, of which eight are located in the Greater Tokyo area,” the trust said.

Mapletree Logistics Trust estimated Greater Nagoya’s stock of large-scale modern multi-tenanted warehouses is about 10 percent of Greater Tokyo’s level, suggesting Greater Nagoya’s supply may be lower than what its gross domestic product may require, offering future growth potential.

In addition, ramp-up warehouses — which offer direct vehicular access to all levels and make moving cargo more efficient — are highly sought after and remain scarce in Greater Nagoya, the filing said.

The property is currently held in trust by Sumitomo Mitsui Trust Bank, with the trust beneficial interest (TBI) held by TMK Hanamizuki Holdings, the filing said.

Under the deal, Godo Kaisha Hinoki will acquire the TBI, and then Mapletree Logistics Trust’s wholly owned subsidiary MapletreeLog Gyoda (Japan) (HKSAR) will make a tokumei kumiai contribution to Godo Kaisha Hinoki’s business in exchange for a 97 percent share of the profits or losses, the filing said.

Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly owned subsidiary of Mapletree Investments, which is Mapletree Logistics Trust’s sponsor, will effectively receive 3 percent of the profits or losses from the business, the filing said.

The structure is common for real estate investment in Japan, the filing said.