Mapletree Spends $3B to Purchase 141 US Warehouses for Private Fund

Mapletree Investments on Thursday announced that it has paid about $3 billion to add to its US logistics holdings, marking the Singaporean real estate fund manager’s third major North American market milestone since May.

The Temasek Holdings-owned firm has purchased two portfolios totalling 141 logistics assets in separate transactions in July and September, it said in a release, with at least one of the sets of sheds having been acquired from funds managed by longtime US partner Exeter Property Group.

“The US logistics sector is amongst the best performing and most resilient of all the real estate markets in which Mapletree operates globally,” said Michael Smith, Mapletree’s regional CEO for Europe and the US. “By combining these recently acquired assets with 14 logistics facilities that we currently own, we have attained sufficient scale and investor interest to create a fourth US-focused private fund with a fully seeded portfolio of 155 logistics assets.”

Smith also noted that the deal propels the firm into the top 10 managers of logistics real estate in the US, in addition to recent acquisitions in the data centre and office segments.

Exeter Connection

The July portfolio comprises 24 assets totalling 6.1 million square feet (566,709 square metres) of net lettable area across Dallas, Memphis, Greater Chicago, central Florida and Boston, Mapletree said. The properties are 98.6 percent occupied with a weighted average lease expiry (WALE) term of 3.3 years.

The September batch boasts 117 assets spanning 22.3 million square feet of NLA across Greater Chicago, the Carolinas, Memphis, Houston and the Washington-Baltimore corridor, with those properties 94.1 percent occupied with a WALE of 4.1 years.

Mapletree offered no specifics regarding the individual assets or the vendor in the transaction. However, images included with the release reveal three of the warehouses as the Arlington Commerce Center near Dallas, Texas; the Morgan Lakes Commerce Center in Savannah, Georgia; and 3955 East Holmes Road in Memphis, Tennessee.

All three of the pictured properties were until recently owned by Big Box Property Owner C, a vehicle managed by Exeter Property Group, and invested by the Abu Dhabi Investment Authority and Canada’s Public Sector Pension Investment Board (PSPP).

In April and May of 2018, Philadelphia-based Exeter had sold 120 industrial assets covering 17 million square feet to Mapletree for an undisclosed sum. Exeter had not responded to inquiries from Mingtiandi regarding the latest transaction by the time of publication.

Around one year after the 2018 sale, Mapletree announced that it had raised $1.8 billion for its Mapletree US & EU Logistics Private Trust (MUSEL), which it seeded with 200 US assets and 62 European properties.

Combining MUSEL with the two new portfolios, Mapletree now manages 355 US logistics facilities covering 70 million square feet of NLA and has assets under management in the sector of $6.9 billion.

Exeter Property Group was acquired by Swedish private equity firm EQT in January this year for $1.9 billion.

Distribution-Driven

Mapletree described the tenant base for its new properties as including third-party logistics providers, consumer goods suppliers, wholesalers and e-commerce operators.

The 821,000 square foot Arlington Commerce Center Building C was completed in 2014 and is leased by US homewares retailer Williams-Sonoma as one of its main distribution facilities.

The 1 million square foot 3955 East Holmes Road is situated near Memphis International Airport, the global hub of FedEx, and is run by the cargo service’s logistics unit, which took over operations from Johnson & Johnson Health Care Systems in 2016.

Cross-Sector Presence

With the latest acquisitions, Mapletree now manages $14.8 billion worth of real estate across the US in the logistics, data centre, commercial, multi-family, serviced apartment and student accommodation sectors.

Earlier this month, the Singapore firm closed on $552 million for its first US office fund, which holds five Grade A office properties across Oakland, California; Dallas, Texas; Raleigh, North Carolina; and Minneapolis, Minnesota.

In May, Mapletree agreed to purchase 29 US data centres from US REIT Sila Realty for $1.3 billion, giving it a portfolio of of tech facilities across 18 states.

The MUSEL logistics vehicle includes assets spread across 26 US states, including California, Texas and New Jersey. Mapletree holds a 34 percent stake in the trust to “align with investor interests” — an approach similar to the strategy taken with Mapletree’s other private funds and the four SGX-listed REITs managed by the company.

Globally, Mapletree now manages $18.7 billion in logistics assets covering an estimated NLA of 224 million square feet across Asia, Europe and the US.