MapletreeLog to raise $79m-82m for acquisitions

It will issue 115m new units through private placement

MAPLETREE Logistics Trust (MapletreeLog) yesterday launched a private placement to raise between $79 million and $82 million for acquisitions.

It plans to issue 115 million new units, which represent 5.9 per cent of all units in issue as at Sept 30. The new units will be priced at between 69 cents and 71 cents each, carrying a discount of 3.9 per cent to 6.6 per cent to the volume-weighted average unit price of 73.9 cents for trades in MapletreeLog’s units last Friday.

The trust manager and the placement agent Citigroup Global Markets Singapore will determine the issue price after a book-building process.

About $78 million from the private placement will go towards two yield-accretive acquisitions in Singapore. In one deal, MapletreeLog will buy a warehouse at 7 Penjuru Close for $43 million. The facility will have a gross floor area of around 41,253 square metres, and the land tenure will expire in May 2035.

MapletreeLog signed a put and call option agreement to buy the ramp-up six-storey single-user warehouse from SH Cogent Logistics.

SH Cogent will lease the property back for an initial 7-year term, which builds in an annual rental escalation of 2 per cent from the second year onwards. It will also have the option of extending the lease for another three years and thereafter, for four years.

According to MapletreeLog, the acquisition will add, on a proforma basis, 0.04 cents or 0.7 per cent to the annualised distribution per unit (DPU) for the period Jan-Sept.

In the second deal, MapletreeLog will be buying a multi-storey warehouse in the east for around $34 million. The trust manager signed a letter of interest for this asset on Oct 15.

MapletreeLog expects both local acquisitions to be completed by end-December, and their total returns will exceed 10 per cent. The trust’s annualised distribution yield as at Nov 9 was around 8.1 per cent.

Funding these two purchases through equity will leave MapletreeLog with enough debt headroom to buy a third asset in Japan. It signed a letter of intent and will pay about $68 million for a multi-storey single-user warehouse in the Greater Tokyo region.

The deal should be completed by the first quarter of next year. The trust expects the net property income yield of this acquisition to exceed 7 per cent, which is above that of its Japanese asset portfolio.

After these three purchases, MapletreeLog’s estimated gearing level will be around 38.5 per cent. Its gearing as at Sept 30 was 38.1 per cent.

The private placement is likely to reduce the stake held by MapletreeLog sponsor, Mapletree Investments, from 46.9 per cent to 44.3 per cent.

MapletreeLog units lost half a cent to close at 73 cents yesterday.

Source: Business Times, 10 Nov 2009