Mapletree Logistics Trust Adding Five Greater Seoul Sheds for $250M

Singapore-listed Mapletree Logistics Trust on Monday announced an agreement to acquire five warehouse assets in South Korea for KRW 280 billion ($250 million), strengthening MLT’s foothold in Asia Pacific’s third-largest e-commerce market.

Situated in the Yongin-Icheon logistics cluster in the southeast corner of Greater Seoul, the five properties have nearly 150,000 square metres (1,614,587 square feet) of net lettable area and are 100 percent occupied.

The sellers are two real estate investment trusts affiliated with Mirae Asset Global Investments, a Korean asset management firm.

“This is an attractive strategic opportunity for MLT to acquire a portfolio of high specification warehouses that will significantly scale up our competitive positioning,” Ng Kiat, chief executive of the trust’s manager, said in a release. “The acquisitions will increase our gross floor area in South Korea by 40 percent, enabling us to better cater to the current and future needs of our customers and capture growth opportunities in the logistics market.”

Korean Crossroads

Yongin-Icheon is a sought-after location among logistics and e-commerce firms for its proximity to the capital area and connectivity with other key locations in the country, Mapletree said. The cluster has access to major expressways running north-south and connecting the east and west coasts.

The five dry warehouses, which have a weighted average age of 4.2 years, are fully tenanted by four Korean third-party logistics firms — Dongsan, TE Logis, Han Express and DPL — whose weighted average lease expiry is 1.7 years.

Dongsan and TE Logis support e-commerce firms Coupang and eBay, respectively. Han Express and DPL serve end-users from the consumer sectors, including a multinational footwear company and a global consumer electronics retailer.

Mapletree calculates a 4.5 percent yield from the Yongin-Icheon assets. Once completed, the acquisitions will expand MLT’s South Korean portfolio to 18 properties and boost the trust’s e-commerce exposure in the country from 15 percent to 25 percent.

MLT is managed by a subsidiary of Mapletree Investments, which in turn is wholly owned by Singapore state holding firm Temasek.

Northern Star

MLT’s warehouse deal is among a growing number of South Korean real estate purchases by foreign investors as global institutions take a larger slice of the country’s notoriously domestic-dominated property markets.

Last June, Hong Kong-listed ESR closed on a $1 billion joint venture with the Canada Pension Plan Investment Board and the Netherlands’ APG Asset Management to develop industrial real estate projects in South Korea. Then in September, UK fund manager Actis announced a joint venture with Korean conglomerate GS Group on a $315 million data centre in Greater Seoul.

In the final weeks of 2020, shares began trading in South Korea’s first dedicated logistics REIT as ESR’s local arm finalised an IPO that helped the warehouse specialist and fund manager raise $650 million.

That influx of foreign cash has helped to boost the country’s real estate market, which grew last year despite the pandemic.

Trades of South Korean real estate in 2020’s fourth quarter rose 12 percent year-on-year to reach $8 billion and for the full year climbed 11 percent to an all-time best of $25.1 billion, according to a report released this month by Real Capital Analytics.