Mapletree Logistics Trust to acquire India warehouse for $14.5 million

SINGAPORE – Mapletree Logistics Trust (MLT) is proposing to acquire a Grade A warehouse in Farukhnagar, which is within the Delhi National Capital Region in India, for 900 million rupees (S$14.5 million).

This represents a 2.4 per cent discount to the asset’s independent valuation of 922 million rupees as at Oct 31.

The acquisition is slated to be completed in the fourth quarter of financial year 2024 and will be 100 per cent funded by debt, MLT’s manager announced on Dec 13.

Based on the trust’s financials as at Sept 30, this is expected to raise MLT’s pro forma aggregate leverage ratio to about 38.9 per cent upon completion of the deal.

The acquisition is projected to be distribution per unit-accretive on a historical pro forma basis.

Sited on 51,446 sq m of land with a net lettable area of 28,745 sq m, the single-storey warehouse was completed in mid-2022. Its features include a floor-to-ceiling height of 12m, a floor loading capacity of 50 kilonewtons per sq m and a fire sprinkler system.

The warehouse is located 7km from the KMP Highway and 21km from National Highway 48, which provides access to major cities in India including Delhi, Gurugram, Mumbai and Ahmedabad.

MLT’s manager said the property is fully leased to “one of India’s largest third-party logistics players with a nationwide presence”, with a remaining lease of eight years as at end-September 2023 and built-in annual rent escalations. This will provide MLT with a stable and growing income stream, it added.

The acquisition of the warehouse is expected to expand MLT’s India assets under management by geography from 0.6 per cent as at Sept 30 to 0.7 per cent. Gross revenue from the country, based on first-half fiscal year 2024 financials, would increase from the current 0.9 per cent to 1.1 per cent. Excluding freehold land, the trust portfolio’s weighted average lease term to expiry of underlying leasehold land would remain unchanged at 41.5 years after the acquisition.

Ms Ng Kiat, chief executive of MLT’s manager, said the transaction is in line with the manager’s continued efforts to rejuvenate the portfolio towards high-yielding modern assets. “Along with our two existing assets in Pune, the proposed acquisition positions MLT strategically to capture opportunities in India, a fast-growing logistics market underpinned by robust domestic consumption and a rising middle class.”

Units of MLT ended one cent up on Dec 13 at $1.63. THE BUSINESS TIMES