SINGAPORE - Mapletree Logistics Trust (MLT) has agreed to acquire a warehouse in South Korea for KRW25.5 billion (S$31.2 million).

The acquisition Daehwa Logistics Centre from Daehwa Logistics Co is line with the trust manager's strategy to rebalance MLT's portfolio towards the higher growth markets and expand presence in South Korea.

The Property is a three-storey Grade A dry warehouse with a gross floor area of some 25,600 square metres (sqm).

It adheres to modern specifications, including a floor to ceiling height of 10 metres, floor loading capacity of 2.7 tonne per sqm, dual layer walls to prevent dew condensation and direct ramp access to all three floors.

It is located within 50km of the capital (Seoul), in one of the core logistics clusters in Gyeonggi province in South Korea, where about 70 per cent of the country's warehouses and distribution centres are concentrated.

Completed in December 2013, the warehouse is fully occupied by three tenants: eBay, one of the world's largest e-commerce companies; Acushnet, a global golf equipment company whose leading brands are Titleist and FootJoy; and the vendor Daehwa, a fast growing local logistics operator that provides specialised third-party logistics services to hypermarket suppliers.

The leases have a weighted average lease term to expiry of 3.5 years with built-in annual rental escalations for 70 per cent of the leased area.

At the purchase consideration of KRW25.5 billion, the property will provide an initial net property income yield of 8.3 per cent and is expected to be distribution per unit accretive.

The acquisition will be funded by debt and is expected to be completed by July.

Upon completion, MLT's aggregate leverage ratio is expected to increase to 33.8 per cent from 33.3 per cent as at March 31, while its total portfolio will increase to 112 properties with a book value of $4.27 billion.