Mapletree Logistics Trust boosts South Korea presence with $100.3m acquisition

The company's e-commerce revenue exposure in South Korea is expected to increase to 36%.

A South Korean logistics centre, worth an estimated $100.3m ( KRW 88.5b), is Mapletree Logistics Trust’s (MLT) latest acquisition

Baeksa Logistics Centre is a 4-storey single block dry logistics facility, with a total gross floor area of over 41,000 sqm on around 30,000 sqm of freehold land. It has a floor loading of over 20 kilonewtons per sqm, a floor-to-ceiling height of 9 to 10 metres, and a full sprinkler system. Direct ramp access and docking yards also make up the structure.

The property is located in northeast Incheon as part of the established Yongin-Incheon logistics hub targeting the Seoul Metropolitan Area. This puts in close proximity to the National Road #3 expressway, which serves as a connection to Gangman and eastern Seoul.

Through the acquisition, MLT’s e-commerce revenue exposure in South Korea is expected to increase to 36% from 31%. A weighted average lease expiry of around 5.1 years and built-in annual rent escalations is also seen with the property.

“The logistics industry has benefitted from recent structural trends such as growing e-commerce and building supply chain resiliency. This acquisition, with its modern specifications and 100% occupancy underpinned by a leading ecommerce company, is expected to be yield-accretive to MLT,” commented Ng Kiat, CEO, Mapletree Logistics Trust Management Ltd.

The property is also estimated to generate a net property income yield of 4% based on the property purchase price. The transaction is expected to be completed by 1Q FY22/23, and will be 100% funded by debt. Upon completion, a gearing ratio of around 39.6% on a pro forma basis is expected.

Currently, the property is fully leased to Hauser, an e-commerce company specialising in furniture storage and delivery.

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