REIT Financial News - MAPLETREELOG ACQUIRES 9th PROPERTY IN JAPAN FOR S$68 MILLION

MAPLETREELOG ACQUIRES 9th PROPERTY IN JAPAN FOR S$68 MILLION. See report and presentation slides.

Key Points

• The property is located in Chiba, Japan and is leased to a major Japanese MNC with remaining fixed lease of about 8 years.
  
• The property yield of the Property at 7.26% is higher than the implied property yield of the existing Japan portfolio of 4.5%.
• The acquisition will be accretive to MapletreeLog’s distribution per unit (“DPU”).
• The acquisition is expected to be completed in 1Q2010.
• The acquisition will be fully funded by debt.
• This will be the 9th property in Japan, and the 83rd property of its overall portfolio.
• With this acquisition, the geographical allocation by gross revenue of the portfolio for Japanese properties will be increased from 15.7% to 17.8%. This ranks after Singapore (52.1%) and Hong Kong (19%).

Author's Note
The Reit has, through a private placement exercise in Nov 2009, issued 115,000,000 New Units at an issue price of S$0.69 per New Unit. The proceeds of about S$79.4 million was used to fully finance the acquisitions of 2 warehouses in Singapore (S$78m). The resulting debt headroom created will help to fund this latest acquisition fully by debt with minimal impact to its gearing. The DPU should increase, but since the acquisition of the Singapore properties were completed in middle of Dec 2009, while acquisition of the Japanese properties were expected to be completed in 1Q2010, the increase will only be fully felt in distributions after Q1 2010.