Mapletree Logistics Trust (MLT) has fully acquired a strata-titled logistics property, Shatin No. 3, in Hong Kong by picking up 38 per cent stake that it does not own for HK$610 million ($77.9 million).
The logistics asset has been in MLT’s portfolio since 2006 and maintains a record of strong operating performance. Shatin is the second largest warehouse market in Hong Kong with strong connectivity to key transportation infrastructure.
CBRE valued the 38 per cent stake at HK$615 million ($78.6 million) as at 31 December 2017, based on the discounted cash flow method and the income capitalisation method. The total cost of the acquisition is estimated at S$115.1 million ($86.4 million) including fees and other payables.
Shatin No. 3 comprises an 18-storeyed warehouse with cargo lift access and a total net lettable area of 39,125 sqm on a site area of 3,400 sq m.
In a statement, Ng Kiat, CEO of MLTM, says, “Following our recent acquisition of Mapletree Logistics Hub Tsing Yi, this acquisition will further expand MLT’s presence in Hong Kong, an attractive market that enjoys healthy organic growth due to supply constraints.”
MLTM intends to reposition the building to generate higher yield and improve the capital value for investors in the REIT.
MLTM intends to finance the acquisition via bank borrowings and internal funds and expects the deal to close this month. The acquisition will also see MLT post an aggregate leverage ratio of 39 per cent, with a total portfolio comprising 125 properties with a book value of S$6.3 billion ($4.73 billion).