(Constituted in the Republic of Singapore pursuant to a Trust Deed dated 5 July 2004 (as amended))

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ANNOUNCEMENT

ACQUISITION OF INTERESTS IN FIVE LOGISTICS ASSETS LOCATED IN SOUTH KOREA

1.

INTRODUCTION

15 February 2021 - Mapletree Logistics Trust Management Ltd., as manager of Mapletree Logistics Trust ("MLT", and as manager of MLT, the "Manager"), is pleased to announce that the following sale and purchase agreements (the "Sale and Purchase Agreements") have been entered into in relation to the acquisition of interests in five modern, freehold logistics assets located in Yongin-Icheon, South Korea (the "Properties", and the acquisitions of the Properties, the "Acquisitions"):

  • (i) a conditional sale and purchase agreement dated 15 February 2021 between an indirect, wholly-owned subsidiary of MLT, MapletreeLog Jungbu Jeil Co., Ltd ("MLT SPV 1"), Kookmin Bank Co., Ltd., in its capacity as trustee of Mirae Asset MAPS Logistics Private Qualified Investor Real Estate Investment Trust No. 3 ("Vendor Fund 1") and Mirae Asset Global Investments Co., Ltd., which is the manager of Vendor Fund 1, to acquire the logistics asset known as CoreLogis (as defined herein);

  • (ii) a conditional sale and purchase agreement dated 15 February 2021 between an indirect, wholly-owned subsidiary of MLT, MapletreeLog Dooil Co., Ltd ("MLT SPV 2"), Kookmin Bank Co., Ltd., in its capacity as trustee of Mirae Asset MAPS Logistics Private Qualified Investor Real Estate Investment Trust No. 4 ("Vendor Fund 2") and Mirae Asset Global Investments Co., Ltd., which is the manager of Vendor Fund 2, to acquire the logistics asset known as Gwan-ri (as defined herein);

  • (iii) a conditional sale and purchase agreement dated 15 February 2021 between Shinhan Bank Co., Ltd., as trustee of IGIS Professional Investment Type Private Placement Real Estate Investment Trust No. 404 (the "REF"), IGIS Asset Management Co., Ltd., as manager of the REF, Kookmin Bank Co., Ltd., in its capacity as trustee of Vendor Fund 1 and Mirae Asset Global Investments Co., Ltd., which is the manager of Vendor Fund 1, to acquire the logistics asset known as AbleLogis (as defined herein);

  • (iv) a conditional sale and purchase agreement dated 15 February 2021 between Shinhan Bank Co., Ltd., as trustee of the REF, IGIS Asset Management Co., Ltd., as manager of the REF, Kookmin Bank Co., Ltd., in its capacity as trustee of Vendor Fund 2 and Mirae Asset Global Investments Co., Ltd., which is the manager of Vendor Fund 2, to acquire the logistics asset known as Bukuk (as defined herein); and

  • (v) a conditional sale and purchase agreement dated 15 February 2021 between Shinhan Bank Co., Ltd., as trustee of the REF, IGIS Asset Management Co., Ltd., as manager of the REF,

Kookmin Bank Co., Ltd., in its capacity as trustee of Vendor Fund 2 and Mirae Asset Global Investments Co., Ltd., which is the manager of Vendor Fund 2, to acquire the logistics assets known as Dongsan (as defined herein).

The acquisition of each of the five Properties above are conditional upon the acquisition of the other properties.

MLT through its direct, wholly-owned subsidiary Yeongdong (Korea) Pte. Ltd. ("MLT SPV 3") 1, proposes to subscribe, on completion of the Acquisitions, for approximately 99.9% of the units in the REF, with the remaining 0.1% units in the REF to be subscribed by Icheon REF Pte. Ltd. ("Icheon REF"), an indirect, wholly-owned subsidiary of Mapletree Investments Pte Ltd ("MIPL").

  • 2. INFORMATION ON THE PROPERTIES

  • 2.1 The Properties consist of five dry storage, high specifications logistics warehouses located within Yongin-Icheon, an established logistics cluster in the Seoul Metropolitan Area (the "SMA") of South Korea, with a total gross floor area ("GFA") of approximately 149,897 square meters ("sq m") on a combined freehold land area of 148,818 sq m. As at 1 February 2021, the Properties have an overall occupancy rate of 100% with a weighted average lease expiry ("WALE") by net lettable area ("NLA")

    of 1.7 years2.

  • 2.2 The Properties are purpose-built with modern specifications for logistics use, including direct ramp access, floor-to-ceiling height of 9 to 12 metres and strong floor loading of 12 to 20 KiloNewton per square metre ("kN psm"). They are strategically located with good connectivity to major transport infrastructure.

  • 2.3 The table below sets out a summary of selected information on the Properties:

Property

Description

Agreed Property Value (KRW billion)

Valuation (KRW billion)

GFA (sq m)

Occupancy

Tenants

Dongsan Logistics

Centre ("Dongsan")

3-storey dry warehouse

114.5

117.8

55,339

100%

Dongsan Logistics

AbleLogis Logistics Centre ("AbleLogis")

3-storey dry warehouse

59.9

62.9

29,980

100%

TE Logis

CoreLogis Logistics Centre ("CoreLogis")

3-storey dry warehouse

50.7

52.3

29,901

100%

Han Express

Bukuk Logistics Centre ("Bukuk")

2-storey dry warehouse

28.2

29.8

18,706

100%

Han Express

Gwan-ri Logistics

Centre ("Gwan-ri")

4-storey dry warehouse

26.7

27.9

15,971

100%

DPL

Total

280.0

290.7

149,897

  • 1 MLT SPV3 is a wholly-owned subsidiary of MLT established in Singapore, with an issued and paid up capital of S$2.00.

  • 2 As at 1 February 2021.

  • 3. DETAILS OF THE ACQUISITIONS

  • 3.1 Valuation and Purchase Consideration

    The agreed property value is KRW 280.0 billion3 (approximately S$334.8 million4) (the "Agreed Property Value") and was negotiated on a willing-buyer and willing-seller basis taking into account the independent valuation of the Properties. The independent valuation conducted by Chestertons Korea Co., Ltd. (the "Valuer"), which was commissioned by the Manager, concluded a market value for the Properties of KRW 290.7 billion2 as at 13 January 2021.

    The Agreed Property Value represents a discount of 3.7% to the valuation of the Properties.

    The Valuer has valued the Properties based on the Market Approach and the Income Approach.

    The purchase consideration payable by the REF, MLT SPV 1 and MLT SPV 2 for the Acquisitions (the "Purchase Consideration") is approximately KRW 280.0 billion (S$334.8 million), which shall be satisfied fully in cash.

  • 3.2 Estimated Total Acquisition Cost

    The estimated total cost of the Acquisitions (the "Total Acquisition Cost") is approximately KRW 298.2 billion5 (approximately S$356.5 million), comprising:

    • (i) the Purchase Consideration of KRW 280.0 billion as described in paragraph 3.1 above;

    • (ii) the acquisition fee payable to the Manager for the Acquisitions pursuant to the trust deed dated 5 July 2004 constituting MLT (as amended and restated) (the "Trust Deed") of approximately KRW 2.8 billion (S$3.3 million) (representing 1.0% of MLT's portion of the Purchase Consideration), which is payable in cash; and

    • (iii) estimated professional and other transaction fees and expenses incurred, or to be incurred, in connection with the Acquisitions (inclusive of due diligence cost, applicable taxes and costs to be incurred in relation to the valuation) of approximately KRW 15.4 billion (S$18.4 million).

  • 3.3 Sale and Purchase Agreements

    The key terms of the Sale and Purchase Agreements include the following:

    (i) the Purchase Consideration is KRW 280.0 billion (S$334.8 million), subject to the adjustments as set forth in the Sale and Purchase Agreements;

    • (ii) customary provisions relating to the Acquisitions, including representations and warranties; and

    • (iii) fulfilment of relevant conditions precedent, including the land transfer approval being obtained in respect of certain Properties.

  • 3 Based on 100% interest in AbleLogis, Bukuk and Dongsan.

  • 4 Unless otherwise stated, an illustrative exchange rate of KRW 836.40 to S$1.00 is used in this announcement.

  • 5 Excluding the KRW 300.0 million (S$0.4 million) to be injected by Icheon REF for the subscription of 0.1% of the units in the REF,

MLT is expected to incur approximately KRW 297.9 billion (S$356.2 million) in relation to the Total Acquisition Cost payable by MLT.

  • 3.4 Unitholders' Agreement

    A unitholders' agreement will be entered into between MLT SPV 3 and Icheon REF to regulate their relationship as unitholders of the REF (the "Unitholders' Agreement").

    MIPL has an aggregate deemed interest in 31.27% of the total number of units in MLT ("Units") in issue. MIPL is therefore a "controlling unitholder" of MLT under both the listing manual of the SGX-ST (the "Listing Manual") and Appendix 6 of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (the "Property Funds Appendix"). In addition, as the Manager is an indirect wholly-owned subsidiary of MIPL, MIPL is therefore regarded as a "controlling shareholder" of the Manager under both the Listing Manual and the Property Funds Appendix. As Icheon REF is an indirect wholly-owned subsidiary of MIPL, Icheon REF is an "interested person" of MLT for the purposes of Chapter 9 of the Listing Manual. Therefore, the entry into the Unitholders' Agreement constitutes an "interested person transaction" under Chapter 9 of the Listing Manual. As at the date of this announcement, the value of all interested person transactions entered into between MLT and MIPL and its subsidiaries and associates during the course of the current financial year ending 31 March 2021 is approximately S$648.4 million, which is approximately 14.2% of the net tangible asset and net asset value of MLT as at 31 March 2020. Save as described above, there were no interested person transactions entered into for the current financial year.

    The Audit and Risk Committee of the Manager has considered the terms of the Unitholders' Agreement, and is of the view that the entry into the Unitholders' Agreement is on normal commercial terms and is not prejudicial to the interests of MLT and its minority Unitholders.

  • 3.5 The Asset Manager

    The asset manager of the REF is IGIS Asset Management Co., Ltd, which is a licensed asset manager in Korea.

  • 4. RATIONALE FOR AND BENEFITS OF THE ACQUISITIONS

    The Acquisitions are in line with the Manager's investment objective to deliver regular and stable distributions to MLT's unitholders ("Unitholders") through the acquisition of yield-accretive, quality income-producing assets. The Manager believes that the Acquisitions will bring the following key benefits to Unitholders:

  • 4.1 Strengthen MLT's portfolio quality and competitive positioning in South Korea with the addition of high quality, modern assets

    The Acquisitions represent an attractive strategic opportunity for MLT to acquire a portfolio of high specifications warehouses that will significantly scale up MLT's competitive positioning. Post- Acquisitions, the total gross gross floor area in MLT's South Korea portfolio will increase by almost 40.0% to over 537,000 sq m.

    The Properties are modern warehouses with a weighted average age (by NLA) of 4.26 years. The Properties have high quality building specifications which include strong floor loading of 12 to 20 kN psm, high floor-to-ceiling height of 9 to 12 metres and large contiguous floor plates of up to 21,000 sq m, catering to the modern requirements of third-party logistics firms ("3PLs") and e-commerce tenants.

6 As at 1 February 2021.

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Mapletree Logistics Trust published this content on 15 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2021 12:12:06 UTC.