Mapletree Logistics Trust given option to buy logistics property in Changi
The proposed acquisition is expected to be completed by 3Q FY21/22.
Mapletree Logistics Trust (MLT) has been granted an option to purchase (OTP) to acquire a logistics property in Singapore from RSH Holdings Pte Ltd for S$24.5m, Mapletree Logistics Trust Management Ltd., Manager of MLT, said.
In a release, the Manager said that HSBC Institutional Trust Services (Singapore) Limited, as a trustee of MLT, has been given the option to acquire the property at 9 Changi South Street 2.
“With a limited supply of logistics properties in the eastern part of Singapore, 9 Changi South Street 2 is an attractive property given its prime location and a relatively long remaining land tenure of over 33 years. The property is also adjacent to our existing property at 15 Changi South Street 2, thus presenting the opportunity for potential economies of scale,” Ng Kiat, the chief executive officer of the Manager said.
The Property, which is easily accessible from ECP expressway, Changi Airport, and the Expo MRT, will attract demand from industries such as electronics, pharmaceuticals, e-commerce, and third-party logistics players.
The Property, with a floor area of about 11,506 square metres, is a part 3-storey, part 4-storey temperature-controlled warehouse building with ancillary offices.
Manager Mapletree said that the Property will be sold with vacant possession and it is in talks with an international third-party logistics player to lease the Property as the anchor tenant.
MLT, when the OTP is exercised, is expected to incur an estimated total transaction cost of S$2.7m, which includes the initial land premium and the acquisition fee payable to the Manager of about S$0.2m, as 1% of the purchase consideration of S$24.5 m.
MLT has paid an option fee of 1% of the purchase consideration and will pay about 4% more upon the exercise of the OTP, with the remaining balance payable upon the completion of the acquisition. The proposal will be funded by debt and is expected to be in the third quarter of the fiscal year 2021 or in 2022, subject to the approval of the JTC Corp.
Upon completion, MLT’s total leverage ratio will be about 38.5% and its total portfolio will be comprised of 164 properties, with total assets under management of S$10.8 billion.
“The Proposed Acquisition is expected to generate a stabilised property income yield of approximately 6.2% based on the purchase price and initial land premium, and it is also expected to be accretive to MLT’s distribution,” the Manager said.