Mapletree Logistics Trust (MLT) has announced plans to acquire three Grade A warehouses, one located in Malaysia and two in Vietnam, for a total of RM558.8 million (S$157.9 million) and 1.3 trillion Vietnamese dong (S$68.4 million) respectively. This strategic move, disclosed by MLT’s manager on Thursday (Feb 29), is aimed at expanding MLT’s footprint in the burgeoning logistics markets of Southeast Asia.
The acquisition in Kuala Lumpur, Malaysia, is priced at a slight discount of about 0.2 per cent below the independent valuation by HSBC Institutional Trust Services (Singapore), acting as MLT’s trustee. This discount further deepens to 1.1 per cent when considering the manager’s valuation. The Shah Alam warehouse, positioned in a key industrial region, is anticipated to yield an initial net property income (NPI) of approximately 5.7 per cent due to its prime location for domestic distribution and last-mile delivery services.
In Vietnam, the properties situated in Ho Chi Minh City and Hanoi are forecasted to generate an initial NPI yield of around 7.5 per cent. These acquisitions are at a discount of 3.2 per cent and 2.9 per cent according to valuations by the trustee and manager, respectively. Located in Binh Duong province’s Mapletree Logistics Park 3 and Hung Yen province’s Hung Yen Logistics Park I, these sites are strategically chosen for their significance to industrial and logistics operations, and their potential in serving as key distribution and e-commerce fulfillment centers.
The total estimated cost for these acquisitions, inclusive of related expenses, is projected to exceed S$234 million. Financing for these purchases is expected to be covered through a combination of debt financing and proceeds from recent divestitures. As a result, MLT’s aggregate leverage is poised to rise modestly from 38.8 per cent to 39.6 per cent on a pro forma basis post-acquisition.
Ng Kiat, CEO of MLT’s managing company, highlighted that these acquisitions follow a year of substantial divestments exceeding S$200 million. The strategic locations of the new properties align with MLT’s objective to tap into the growth dynamics of emerging Asian markets. The addition of these modern, Grade A warehouses is set to address the supply gap in both Malaysia and Vietnam, where such facilities currently represent 39 per cent and 30 per cent of the total warehouse supply by floor area, respectively.
This expansion will not only enhance MLT’s capacity to meet the growing demands of tenants but also leverage the rent premiums associated with modern over traditional warehouses. Following the completion of these transactions, MLT’s portfolio in Malaysia and Vietnam will grow to encompass 27 assets, marking a significant increase in gross floor area in both countries.
The manager also noted that Malaysia and Vietnam are increasingly recognized as key players in the structural shift of global supply chains, benefiting from competitive labor costs, skilled labor forces, and supportive government policies amidst challenges such as the US-China trade tensions and calls for deglobalization. MLT units observed a 0.7 per cent increase, closing at S$1.48 on Thursday, prior to the announcement.
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