Mapletree Logistics Trust to acquire South Korea logistics property for around S$100M

A South Korean 10,000 won note. Photo by Minho Jeong on UnsplashA South Korean 10,000 won note. Photo by Minho Jeong on Unsplash

Mapletree Logistics Trust has entered a deal to acquire the Baeksa Logistics Centre in South Korea for KRW88.5 billion, or around S$100.3 million, the REIT said in a filing to SGX Monday. 

The property, which was completed in December, is a modern four-storey single block dry logistics facility, with direct ramp access and large docking yards, the filing said. The site is located in northeast Icheon, in an established logistics hub serving the Seoul Metropolitan area, the filing said.

An independent valuation valued the property at KRW91.5 billion at 21 December 2021, the filing said. 

The net property income yield is estimated at 4.0 percent based on the purchase price, and the deal is expected to be accretive to distribution per unit (DPU), the trust said.

The deal, which is expected to be completed by the fiscal first quarter, will be fully funded by debt, MLT said.

“The logistics industry has benefitted from recent structural trends such as growing e-commerce and building supply chain resiliency,” Ng Kiat, CEO of the trust’s manager, said in the statement.

“This acquisition, with its modern specifications and 100 percent occupancy underpinned by a leading ecommerce company, is expected to be yield-accretive to MLT,” she said. 

The property is fully leased to Howser, an e-commerce company specializing in furniture storage delivery and installation, the filing said, adding the company has a tie-up with Coupang to deliver furniture sold on its platform. 

The deal will raise Mapletree Logistics Trust’s exposure in South Korea to e-commerce revenue to 36 percent from 31 percent previously, the filing said.

Correction: An earlier version of this article misstated the name of the trust in the last paragraph. The reference has been corrected.