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MapletreeLog acquiring remaining 38% of HK warehouse in Shatin for $104 mil

By PC Lee

/ The Edge Singapore |

January 6, 2018 11:00 PM SGT

SINGAPORE (Jan 5): Mapletree Logistics Trust is now the 100% owner of the strata-titled logistics property called Shatin No. 3 in Hong Kong.

This comes after one of MLT’s wholly-owned subsidiaries entered into a sale and purchase Agreement with a third party vendor for the acquisition of the remaining 38% in strata share value in the property for HK$610 million ($103.7 million).

Located at No. 22, On Sum Street in Shatin, New Territories, Shatin No. 3 comprises an 18-storey warehouse with cargo lift access. It has a total net lettable area of 39,125 sqm on a site area of 3,400 sqm.

Exterior of Shatin No. 3 at On Sum Street, Shatin, New Territories, Hong Kong

(Credit: Mapletree Logistics Trust)

Mapletree Logistics Trust Management (MLTM), the manager of MLT, says Shatin No. 3 has been in MLT’s portfolio since 2006 and has a consistent track record of strong operating performance.

Shatin is the second largest warehouse market in Hong Kong which enjoys good connectivity to key transportation infrastructure and the population centres of Hong Kong.

Ng Kiat, CEO of MLTM, says, "We believe there is potential for the whole building to be repositioned through asset enhancements to attract higher value tenants. Following on our recent acquisition of Mapletree Logistics Hub Tsing Yi, this acquisition will further expand MLT’s presence in Hong Kong, an attractive market that enjoys healthy organic growth due to supply constraints.”

MLTM intends to reposition the building with the objective of generating a higher yield and improved capital value for MLT’s unitholders.

CBRE has independently valued the 38% stake at HK$615 million as at Dec 31 2017 based on the discounted cash flow method and the income capitalisation method.

Including stamp fees, other professional fees and the acquisition fee payable to the manager of 1% of the purchase consideration, the total costs of the acquisition are estimated at $115.1 million.

MLTM intends to finance the acquisition via bank borrowings and internal funds.

The acquisition is expected to to be completed this month.

After completion of the acquisition, MLT's aggregate leverage ratio is expected to be 39%, while its total portfolio will comprise 125 properties with a book value of $6.3 billion.

This story, written by PC Lee for The Edge Singapore, first appeared on Jan 5.

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