Mapletree Investments has raised $1.8 billion for its first ever US and European logistics fund, leveraging the returns from leasing warehouses to e-commerce firms to expand the Singapore-based company’s capital management business.
The firm, which is backed by Temasek Holdings, announced yesterday that it had used the total equity of the fund to syndicate a new Mapletree-sponsored private trust comprised of 262 logistics assets from Mapletree’s portfolio with a combined value of $4.3 billion.
Mapletree confirmed to Mingtiandi that 200 of the assets are located in the US, while 62 are in Europe.
Known as Mapletree US & EU Logistics Private Trust (MUSEL), the fully invested trust spans 56 million square feet (5.2 million square metres) of facilities across the United States and Europe which are primarily occupied by e-commerce firms.
Attracting Investors to Big Sheds
Mapletree’s group CEO Hiew Yoon Khong said that the fund raise demonstrates persistent demand among investors for logistics assets, notwithstanding the uncertainty brought to the markets by the coronavirus pandemic.
“Despite the challenging macroeconomic global outlook, investors are attracted to the robust fundamentals of the logistics sector and resilience of our high-quality, income-producing logistics portfolio across the US and Europe,” Hiew said.
The company noted in its announcement that it had drawn investments from a geographically diversified group of investors including pension funds, insurers, banks, corporates and high net worth individuals.
Although further details of the vehicle’s investors have not been released, Mapletree’s previous private trusts have been backed by firms including Great Eastern Life Assurance Company, DBS Bank and UBS AG.
The Temasek unit will hold a 34 percent stake in MUSEL to “align with investor interests” – an approach similar to the strategy that Mapletree has followed other private funds and the four SGX-listed REITs managed by the company.
Profiting From E-Commerce Demand
With a committed occupancy of 94 percent and a weighted average unexpired lease term of 4.4 years across the portfolio, two-thirds of MUSEL’s net leasable area is leased by e-commerce companies, while the rest is taken up by consumer goods firms and third-party logistics operators.
“Even with the current backdrop of economic uncertainty, the group expects the portfolio to generate stable dividends and attractive total returns,” said Hiew.
The assets in the US are spread across 26 states including California, Texas and New Jersey, while the European facilities are located in 20 cities across seven countries, including Poland, France and Germany.
Mapletree said the properties are all located in “established distribution centres within major logistics markets”, where changing consumer expectations are driving the need for faster delivery times.
Mapletree had assembled the portfolio between 2018 and 2019, with the company’s $1.1 billion acquisition of 16.5 million square feet of US and European assets from Prologis in October 2018 forming the basis for a large chunk of the trust.
Opting for Private Trusts over REITs
The $1.8 billion fundraise for MUSEL follows Mapletree’s success in drawing investments for two other fully seeded trusts over the last three years.
Just four months ago, Mapletree closed its Australia-focused MASCOT private trust at A$654 million ($394 million) in total equity, with the ten grade A office assets in the portfolio carrying a combined value of A$1.4 billion.
In 2017, the company raised $535 million for Mapletree Global Student Accommodation (MGSA) Private Trust, which holds a $1.3 billion student housing portfolio comprising 14,000 beds across 22 cities in the US and UK.
Hiew said at the that Mapletree closed on the MGSA trust, that it was his conviction that privately traded vehicles were superior to publicly listed REITs because of the speed with which they can be brought onto the market and their operational cost-effectiveness.
Homing in on Sheds in the US and Europe
Mapletree’s equity raise comes off the back of a push by major players in Singapore eager to get a slice of the steady returns the logistics sector can offer in Europe and the US.
Just last month, Singapore’s GLP doubled its European logistics footprint to five million square metres through the €1 billion ($1.1 billion) acquisition of Goodman Group’s central and eastern European logistics assets.
That deal came three months after Singapore sovereign wealth fund GIC ramped up its European logistics holdings by agreeing to acquire a 28 asset warehouse portfolio from Apollo Global Management for about €950 million.
Both those deals followed GLP’s sale of a portfolio of US warehouse assets to Blackstone last year for $18.7 billion in what stands as the largest private real estate transaction ever.