MapleTreeLog

  The quick deployment of its proceeds from the recent issue of perpetual securities into higher yielding (6.2-9.9%, weighted average 7.0% net property income yield) assets should remove overhang of any potential dilution. Gearing expected to remain c.40% (it will be higher at 42.5% if we account for the perpetuals with a 50% equity credit instead, in accordance to Moody’s stricter guidelines).. The vendors are Chungbu The First Logistics Co Ltd (Jungbu Cold Warehouse), Dooil Cold Store Co Ltd and  Woosung Cold Store (Dooil Cold Warehouse). They will each lease back the property for a period of 10 years on a triple net basis, with annual escalations of 3% p.a., offering long term income stability and built-in organic growth. Initial yields are high at close to 9.5-9.9%, which we believe reflects the “cold storage” building specifications and are more costly to maintain compared to a typical dry warehouse. The acquisitions are expected to be funded from the proceeds raised from the recent perpetual securities issue. Since the start of the year, MLT has announced close to S$400m of asset purchases, which we have already factored in our estimates.Mapletree Logistics Trust (MLT) continues to expand into Korea with the proposed acquisition of 2 cold warehouses worth a total KRW 63.5bn (S$71.3m). These warehouses are located in Gyeonggi-do, the largest logistics cluster in South Korea, where close to 70% of warehouse and distribution centres are located. These warehouses are specialised, purpose-built with special chambers to handle quick freezing of food products and are well equipped to service the various stages of the cold supply chain.