Singapore-based Mapletree Logistics Trust (MLT) has expanded its presence in South Korea with the acquisition of a portfolio of five modern, freehold logistics properties in Yongin-Incheon, South Korea.
The properties are being acquired from two logistics-focused REIT’s managed by Mirae Asset Management. MLT will pay ₩280bn (S$334.8m) for the facilities generating an initial net income yield of 4.5%.
The assets are all currently 100% leased to four established local 3PLs and 45% of the properties’ revenue base will be generated by tenants connected to online retail activities. Two of the tenants, Dongsan Logistics and TE Logis provide e-fulfilment services for Coupang and e-Bay, the two leading e-commerce players in South Korea. The acquisitions will raise MLT’s e-commerce revenue exposure in South Korea from 15% to 25%.
In an announcement released by the company, Ms Ng Kiat, CEO of MLT said, “This is an attractive strategic opportunity for MLT to acquire a portfolio of high specifications warehouses that will significantly scale up our competitive positioning. The acquisitions will increase our gross floor area in South Korea by 40%, enabling us to better cater to the current and future needs of our customers and capture growth opportunities in the logistics market.”
The properties offer almost 150,000 square metres in total gross floor area and have a weighted average age of 4.2 years. Yongin-Incheon is located in the south-east region of the Seoul Metropolitan Area. The district is a prime logistics location with over half of Seoul’s warehouse supply clustered together in the area. As well as being close to the capital, the district has easy access to two major north-south expressways and the Yeongdong expressway, that connects South Korea’s east and west coasts.
The acquisition will be funded though Mapletree’s existing debt facility and will increase MLT’s aggregate leverage ratio to 38.9%. The purchase adds to MLT’s existing 13 logistics assets in South Korea and takes the total number of properties in MLT’s global portfolio to 161. Following the acquisition MLT’s assets under management are valued at S$10.5bn ($7.9bn).
