SINGAPORE (THE BUSINESS TIMES) - Mapltetree Logistics Trust (MLT) is acquiring a portfolio of 17 grade-A logistics assets with an average age of 1.6 years in China, Vietnam and Japan for a combined total value of $1.4 billion.
In a bourse filing on Tuesday (Nov 23), the manager said that proposed acquisitions of 13 properties located in China, through subsidiaries of Mapletree Investments and a subsidiary of Itochu Corporation, amounts to $870 million, while acquisitions of 3 properties in Vietnam, through the subsidiary of Mapletree Investments, is $129.9 million.
Separately, the manager also announced the proposed acquisition of an effective 97 per cent in the trust beneficial interest of Kuwana Logistics Centre located in Japan. The acquisition is from an unrelated third party vendor at an agreed property value of $416.3 million. The remaining 3 per cent effective interest in the property will be held by Mapletree Investments Japan Kabushiki Kaisha, an indirect wholly owned subsidiary of MLT.
The 13 new assets in China will be acquired for 1.15 billion yuan (S$246 million) in cash, while the remaining amount will be inter-company loans worth 1.77 billion yuan that MLT will pay through cash and new units, as well as 1.24 billion yuan in bank loans. For Vietnam's properties, U$14.4 million will be satisfied in cash, while the rest will be an undertaking of inter-company loans. Whereas for the new Japanese property, which comes at a discount of about 1.7 per cent to the independent valuation, will be paid for fully in cash.
The trust on Nov 23 proposed an equity fundraising of new units in MLT to raise gross proceeds of about $700 million. Some $675.5 million of the amount will be used to fund the acquisitions, while $24.5 million will be used to pay for fees and expenses in connection with the acquisitions and equity fundraising.
The fundraising includes a private placement of between 209.3 million and 215.1 million new units at an issue price of between $1.86 and $1.911 per new unit, to raise gross proceeds of approximately $400 million. This represents a volume-weighted average price (VWAP) discount of 1.2 per cent and 3.8 per cent to the adjusted VWAP of $1.9339 per unit respectively.
A non-renounceable preferential offering of up to 163.4 new units to existing eligible unitholders at an issue price of between $1.82 and $1.87 per new unit is also proposed to raise gross proceeds of about $300 million. This represents a 1.9 per cent and a 4.5 per cent discount respectively to the VWAP of $1.9485 per unit of all trades on the Singapore Exchange for the preceding market day on Nov 22.
DBS, HSBC Singapore and OCBC have been appointed as the joint global coordinators and bookrunners for the fundraising.
The China acquisitions will deepen MLT's presence in the region which will now see 43 assets in 29 cities. The scarcity of grade-A warehouses in the China market as well as the location of the properties in close proximity to large population catchments bring key benefits to unitholders, the manager noted.
"The enlarged portfolio allows MLT to offer tenants a multi-city network of warehouse facilities, positioning MLT to be the preferred partner for fast-growing tenants looking to build presence across the country," the manager said.
Vietnam is also a beneficiary of the structural trend of supply chain diversification, with competitive costs and an attractive investment environment.
The manager added: "With rising consumption, an expanding middle-income urban population and strong e-commerce adoption rate, demand for quality logistics space is expected to remain robust, while supply of Grade-A logistics space remains limited."
Meanwhile, the Japan Property to be acquired is a freehold, 5-storey dry logistics facility with a gross floor area of over 1.7 million square feet. It is located within an established industrial and logistics cluster in Greater Nagoya, and is in close proximity to Nagoya City, Nagoya Port and Centrair Airport, as well as the ShinMeishin Expressway.
Chief executive officer of the manager, Ng Kiat said that the acquisitions in China and Vietnam will expand MLT's network connectivity in those large growing consumer markets while the acquisition in Japan will scale up MLT's presence in Greater Nagoya, an attractive logistics market strategically located between Greater Tokyo and Greater Osaka.
"The pandemic has highlighted the importance of logistics and placed a greater emphasis on supply chain resiliency, fuelling demand for modern logistics space," she added.
The trust requested for a trading halt on Tuesday (Nov 23) morning. Units of MLT closed one cent or 0.5 per cent higher at $1.95 on Monday.