Mapletree Logistics Trust Buying Malaysian, Vietnamese Sheds for $174M

Mapletree Logistics Trust (MLT) is adding a warehouse in Malaysia and a pair of logistics assets in Vietnam for a total of S$234 million ($174 million), as it continues to expand its Southeast Asia portfolio.

The manager of Singapore-listed MLT announced on Friday that it has entered into sale and purchase agreement with its sponsor, Temasek Holdings-owned Mapletree Investments, to purchase a logistics facility in the city of Shah Alam, southeast of Kuala Lumpur for MYR 558.8 million ($117.8 million).

MLT also agreed to pay its sponsor a combined VND 1.2 trillion ($50.7 million) to acquire Mapletree Logistics Park 3 in the southern Vietnamese industrial hub of Binh Duong and Hung Yen Logistics Park I in the northern province of Hung Yen.

“Strategically located in logistics hubs serving the growing consumption bases in Kuala Lumpur, Ho Chi Minh City and Hanoi, these acquisitions position our portfolio to capture emerging Asia’s growth potential,” said Ng Kiat, chief executive officer of the trust’s manager. “At the same time, developed Asian markets, which account for the majority of our revenue base, continue to provide stability to MLT’s portfolio.”

Southeast Asia in Style

Spanning a combined net lettable area of 249,340 square metres (2.7 million square feet), MLT is acquiring the trio of projects at an initial net property income yield of 6.2 percent as the REIT turns to emerging markets for growth and diversity.

The largest of the three assets, Mapletree Logistics Hub – Jubli Shah Alam, comprises two blocks of four-storey ramp-up warehouses spanning 127,442 square metres and is located about 22 kilometres southwest of Kuala Lumpur city centre.

Completed last year, the property is now fully occupied and counts a Chinese e-commerce logistics firm, a Singapore third-party logistics provider and a global brewing company as its top tenants.

Located in Binh Duong province, north of Ho Chi Minh City, Mapletree Logistics Park 3 comprises four single-storey warehouses with a net lettable area of 61,712 square metres. The five-year-old asset provides storage space for e-commerce, local retailers and third-party logistics providers and was 100 percent occupied as of 31 December.

Hung Yen Logistics Park I is MLT’s first location in Hung Yen province with its four single-storey warehouses spanning 60,186 square metres. The two-year-old asset is 90 percent occupied, with tenants including a Japanese electronics firm and local Vietnamese transport companies.

Excluding fees payable to the manager and other related costs, the REIT is paying S$226.3 million for the portfolio, which is equivalent to S$907.6 per square metre. The total consideration represents a 1.7 percent discount to the portfolio’s book value of S$230.1 million, with the transactions expected to be completed in two months.

MLT plans to finance the acquisitions with a mix of debt and internal resources, with the REIT’s aggregate leverage set to rise to 39.6 percent post-deal from 38.8 percent currently.

Growth Markets

The acquisitions will boost the Malaysia allocation of MLT’s S$13 billion in assets under management to 5.5 percent from 4.4 percent currently, while the Vietnam slice will increase to 2.9 percent from 2.4 percent, with the trust’s manager seeing an opportunity to boost returns.

“The acquisitions will deepen MLT’s network connectivity in these growth markets and position the trust to capitalise on favourable demand drivers for logistics space, such as growing consumption and greater focus on supply chain diversification,” the manager said in the statement.

Citing industry estimates, MLT’s manager pointed out that e-commerce revenue in Malaysia is projected to grow by around 6.7 percent annually from 2022 through 2026, with Vietnam’s online shopping sector expected to grow at a compounded annual rate of 22.1 percent over the same period.

In the nine months ended December 2023, MLT booked distributable income of S$323.7 million, which was up 4 percent from a year earlier, after the REIT purchased a portfolio of properties in Japan, South Korea and Australia from affiliates of CBRE Investment Management for S$913.6 million.