Mapletree Logistics Trust to acquire logistics assets in China, Vietnam, Japan for S$1.47B

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  • Mapletree Logistics Trust plans to buy 17 properties across China, Vietnam and Japan for a total S$1.47 billion
  • The sellers include sponsor Mapletree Investments and Itochu Corp.
  • The deals will be funded via a combination of equity and debt

Mapletree Logistics Trust has entered deals to acquire a portfolio of 16 logistics properties, including 13 in China and three in Vietnam for 4.11 billion yuan (S$870 million) and US$95.9 million (S$129.9 million), respectively, the trust said in a filing to SGX late Monday.

The China properties will be acquired from subsidiaries of the trust’s sponsor, Mapletree Investments, and a subsidiary of Itochu Corp., while the Vietnam properties will be purchased from a subsidiary of Mapletree Investments, the filing said.

Separately, Mapletree Logistics Trust also plans to acquire an effective 97 percent interest in a logistics facility in Japan from an unrelated third party for around 35 billion yen, or around S$416.3 million.

The total acquisition cost of the 17 properties is estimated at around S$1.47 billion, the filing said.

Mapletree Logistics Trust said it plans to fund the deals with a combination of equity, including consideration units, and debt. Mapletree Investments has agreed to receive consideration units as part of the acquisition price for the China properties, the filing said.

“The pandemic has highlighted the importance of logistics and placed a greater emphasis on supply chain resiliency, fuelling demand for modern logistics space. The acquisitions of these 17 modern Grade-A logistics assets with an average age of 1.6 years position us well to capture these structural trends,” Ng Kiat, CEO of the REIT’s manager, said in the statement.

“The acquisitions in China and Vietnam will expand MLT’s network connectivity in these large growing consumption markets while the acquisition in Japan will scale up our presence in Greater Nagoya, an attractive logistics market strategically located between Greater Tokyo and Greater Osaka,” she added.

On a pro forma basis, depending on the financing methods, the distribution per unit (DPU) will increase by around 1.2 percent, the filing said.

The trust said China is an attractive logistics market, with favorable supply-demand dynamics, bolstered by increasing urbanisation, a growing middle class and rising e-commerce. There’s also a scarcity of Grade-A warehouses in the market, the trust said.

The China acquisitions will expand the trust’s presence there to 43 assets in 29 cities, adding three provinces to the geographical coverage, the filing said.

Vietnam’s market is also supported by strong fundamentals, including rising consumption, an expanding middle-income urban population and a strong e-commerce adoption rate, the trust said. The country is also benefiting from supply-chain diversification, the filing said.

“Supply chain shocks due to trade tensions between the United States and China, as well as the Covid-19 pandemic have prompted many global manufacturers to diversify their supply chains across Asia in a multi-country strategy,” the filing said. “The diversification of supply chains has benefitted the Southeast Asian economies, such as Vietnam, which offers sound operating environments at lower costs and low
geopolitical risks.”

The deals will require shareholder approval at an extraordinary general meeting (EGM).

Read more details about the China and Vietnam properties.