Mapletree Logistics Trust (MLT) is set to buy Mapletree Logistics Hub Tsing Yi in Hong Kong for about HK$4.8 billion (S$836 million).
The manager of the trust said in a statement yesterday that HSBC Institutional Trust Services (Singapore), as the trustee of MLT, has entered into a conditional share purchase agreement with Mapletree Overseas Holdings for the acquisition.
The agreed HK$4.8 billion price tag represents a discount of around 3 per cent and 2.4 per cent to the respective independent valuations conducted by Colliers and CBRE, it said. Colliers was commissioned by the manager, and CBRE by the trustee.
The manager noted that Hong Kong is an attractive logistics market underpinned by favourable fundamentals. "Its strategic location as the key gateway to China and its position as a key global transport hub have supported demand for warehouse space. The growth of e-commerce in both Hong Kong and mainland China is providing another new source of demand for logistics space." It added that the property will be a "strategic addition" to MLT's portfolio.
After the acquisition, Hong Kong will become the second-largest income contributor to MLT, accounting for 27 per cent of its net property income (NPI), up from 17 per cent previously. It is expected to provide an NPI yield of 5.7 per cent and be distribution per unit-accretive to unit holders, said the manager's chief executive, Ms Ng Kiat.
Mapletree Logistics Hub Tsing Yi is an 11-storey modern ramp-up warehouse with a net lettable area of 148,065 sq m, and is designed to operate at a high level of throughput on a 24-7 basis.
Located in Tsing Yi, it is close to the Kwai Chung-Tsing Yi container terminals, and is well-connected by highways to the city centre, Hong Kong International Airport and the mainland China boundary.
As one of 14 modern warehouses in Hong Kong, the property has full committed occupancy. It is leased to 12 tenants, including Ever Gain, adidas, HKTV, and DKSH, which represent a range of demand, including air/sea freight, third-party logistics, e-commerce and cold storage.
"Hong Kong has consistently been one of MLT's best performing markets and continues to show great promise, due to sustained demand and limited supply," said Ms Ng.
"This acquisition will increase our net lettable area in Hong Kong by more than 70 per cent to 3.8 million sq ft, and strengthen MLT's position as a major player to meet the growing logistics demand in Hong Kong."
She added that with its prime location, modern specifications and fully-committed occupancy by quality tenants, the property will enhance MLT's income and tenant diversification.
The acquisition is subject to approval by unit holders at an extraordinary general meeting that will be held on Sept 13.
MLT units closed 0.4 per cent or half a cent higher at $1.195 yesterday, before the announcement was made.