SINGAPORE - Mapletree Logistics Trust (MLT) will sell two warehouses in Japan for a total of 13.5 billion yen (S$165.4 million) to Godo Kaisha Asset Toshi Jigyo 4 Go.
The Zama Centre is a 10-year-old warehouse located in Kanagawa prefecture while Shiroishi Centre is a 43-year-old warehouse located in Hokkaido prefecture.
Both are four-storey warehouses served by cargo lifts, with gross floor area of 41,170 square metres and 11,181 sqm, respectively.
The trust manager's chief executive officer, Ms Ng Kiat noted that all viable options for Zama Centre and Shiroishi Centre had been considered.
"In view of their older warehouse specifications, limited future income growth and lack of redevelopment potential, and considering the offer on hand, we concluded that divesting the properties is desirable in the interest of MLT's unitholders," she said.
"The net proceeds from the divestment can provide greater financial flexibility for us to seize other attractive opportunities offering higher yields or greater income growth," she added.
The two properties were purchased for 12.31 billion yen in 2007 and their latest valuation as at March 31, 2017 was 10.23 billion yen.
The sale price works out to 10 per cent above the purchase price and 32 per cent above the latest valuation.
After providing for taxes and transaction related expenses, MLT is expected to recognise an estimated divestment gain of about 234 million yen, which will be distributed to MLT's unitholders.
More details on this will be provided when the final distributable amount has been determined.
Assuming the Divestment was completed on April 1, 2016, the pro forma impact of the divestment on MLT's net property income and distribution per unit for the financial year ended March 31, 2017 is a reduction of S$7.1 million and 0.04 cents, respectively.
The estimated net proceeds from the divestment is about 12.54 billion yen, after providing for taxes and transaction related expenses such as professional fees.
Apart from distributing the divestment gain, the net divestment proceeds may be used for funding committed investments, reducing existing debt and other general corporate purposes.
The sale is expected to be completed by the third quarter of 2017.
Following this, MLT will own a total of 125 properties, including 20 in Japan, with an aggregate value of S$5.4 billion and a gross floor area of 3.6 million sqm.