Mapletreelog achieves significant milestone in South Korea

Mapletreelog achieves significant milestone in South Korea:

• Press Release
• Presentation Slides

Key Points

• Mapletree Logistics Trust Management Ltd. (“MLTM”), as Manager of Mapletree Logistics Trust (“MapletreeLog”), has today signed a Conditional Sale and Purchase Agreement with Korea Port Processing Co. Ltd (“KPPC”) for the acquisition of KPPC Pyeongtaek Centre in Pyeongtaek-si, Gyeonggi-do, South Korea (the “Property”). The Property will be acquired at a purchase price of KRW 75.6 billion (approximately S$85.9 million).
• Comprising two blocks of dry goods warehouses with a total gross floor area of about 100,900 sqm, the Property is one of the largest facilities in the Gyeonggi-do province. There is also potential for organic growth as it has yet to maximise its permissible plot ratio, which will yield an additional  gross floor area of close to 20,000 sqm. This can be tapped upon to meet additional requirements in the future.
• The Property provides an initial net property income yield of 8.6%. The vendor, KPPC, will lease the entire property for a period of 5 years with an annual rental escalation of 3.0%.
• The acquisition is expected to be completed by 3Q 2011. 
• Upon its completion, MapletreeLog’s portfolio will increase to 98 properties and the book value of the total portfolio would be approximately S$3.7 billion. 
• Given the sizeable acquisition, the contribution of South Korea to the total portfolio’s gross revenue is expected to increase from 2.7% to 5.6%. Consequently, KPPC will be the first Korean customer in MapletreeLog’s list of top ten customers; thus further diversifying its customer base.
• MapletreeLog has sufficient financial flexibility and capacity to fund the acquisition. Assuming that the purchase price and other acquisition costs of the Property are fully funded by debt, MapletreeLog’s gearing level will increase to about 41% (after taking into account all acquisitions and divestments announced to date).

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