REIT Financial News - 22 AUG 2010: Mapletreelog gains further foothold in South Korea with second property

Mapletreelog gains further foothold in South Korea with second property. See:

• Press Release
• Presentation Slides

Key Points

• Acquisition of 2nd property in South Korea for KRW 28 billion (approximately S$32 million)
• Accretive acquisition with initial net property yield in excess of 9%; higher than existing South Korea asset of 7.7%
• The vendor, Multi-Q Logistics Co. Ltd, specializes in the storage and
  distribution of fast moving consumer goods. The Vendor will lease back the Property for 5 years at rentals that provide for annual escalation.
• This acquisition will be the seventh announced since December 2009, bringing the total acquisitions announced to-date to about equivalent of S$460 million. 
• The total book value of MapletreeLog’s investment properties currently stands at about S$3.09 billion, and will reach approximately S$3.32 billion, on completion of all the announced acquisitions.
• Assuming that the purchase price and other acquisition costs of the Property are fully funded by debt, MapletreeLog’s gearing level will increase to 44.2%, after taking into account all acquisitions announced to date.

Author's Note
The Reit has been quite aggressive in its acquisitions recently. The gearing level will increase to 44.2% assuming all the acquisitions are funded by debt. This will make it one of the highest in terms of gearing among the S-Reits. I will not be surprised if the Reit goes for another round of equity fund raising.