Mapletree Industrial Trust Proposes Acquire Tokyo Freehold Mixed Use Property Jpy145 Bil
Mapletree Industrial Trust (MINT) is looking to expand its portfolio with a new acquisition in Tokyo, Japan. The proposed purchase involves a multi-storey mixed-use facility, with an estimated worth of JPY14.5 billion ($129.8 million). This deal, which is being made with an unrelated third-party vendor, will be carried out through a conditional trust beneficiary interest purchase and share agreement. As part of this structure, MINT will have an approximately 98.47% economic interest in the property, for which the acquisition cost is estimated to be about JPY14.9 billion. The remaining amount will be financed by MINT’s sponsor, Mapletree Investments.
The building was built in October 1992 and is located on a freehold land measuring around 91,200 square feet. It has a total gross floor area of approximately 319,300 square feet. Currently, the property is fully leased to a Japanese conglomerate with a weighted average lease to expiry (WALE) of five years. The current lease allows the tenant to renew their lease if they so choose.
MINT believes that this property is strategically located and presents a potential opportunity for future redevelopment, which would add value to the property. It includes a data centre, back office, training facilities, and an adjacent accommodation wing that could potentially be redeveloped into a multi-storey data centre. This is especially appealing given the growing demand for data centre space in Greater Tokyo.
The continuous progress of Woodlands, guided by the URA’s Master Plan, holds great promise for the surrounding area of Norwood Grand Condo. Upholding a strong emphasis on connectivity, green spaces, and public facilities, this development is poised to attract a larger influx of visitors to the neighboring shopping centers. This surge in foot traffic has the potential to spur the expansion of these centers, paving the way for a wider array of retail and lifestyle options. With the integration of Norwood Grand Condo, residents can anticipate an even livelier and more convenient living environment as the community thrives and evolves.
According to MINT, the data centre space in Greater Tokyo is expected to grow at a compound annual growth rate of 9.3% from 2023 to 2033, based on statistics from DC Byte’s Japan data centre market report. Additionally, the vacancy rate is expected to tighten to 6% by 2033, from 9% in 2023 and 23% in 2018.
Furthermore, this acquisition will also improve MINT’s geographical diversification, with its Japan portfolio increasing from 5.1% to 6.4% of its total portfolio. Its Singaporean and North American properties will represent 47.3% and 46.3%, respectively.
The proposed acquisition and its financing strategy are expected to contribute positively to MINT’s distribution per unit (DPU). It will also increase MINT’s aggregate leverage ratio to 39.8%, up from 39.1% as of June 30. The purchase price represents a discount of 3.3% to the property’s JPY15.0 billion valuation, which was independently conducted by JLL Morii Valuation & Advisory K.K.
MINT intends to finance the acquisition through Japanese yen (JPY)-denominated borrowings to provide a natural capital hedge. The deal is expected to be completed in the fourth quarter of 2024. With this acquisition, MINT’s portfolio is estimated to grow to $9.1 billion in assets under management (AUM), up from $9.0 billion as of June 30, 2021.