Mapletree Logistics unveils two capital recycling deals

It will acquire 190A Pandan loop for $34m.

Mapletree Logistics Trust has reported two capital recycling deals. The first involves the acquisition of 190A Pandan loop for $34m which is located with a JTC food zone, and the second is the proposed divestment of 134 Joo Seng Road for $13.5m which is expected to complete in 1Q15. Proceeds from the sale will be channeled towards the funding of the new acquisition in.

According to DBS, these two deals will have minimal impact but MLT is slated for an earnings upside as it increases its footprint in the JTC food zone.

“We see significance from the Manager’s continued strategy of actively managing its portfolio and divesting low-yielding assets, thus keeping MLT’s portfolio relevant and contemporary for end users. Apart from steady earnings from the target asset (79% leased to high quality tenants with a WALE of 7.1 years), we see further earnings upside and returns from the potential doubling of the property’s GFA through maximizing unutilized plot ratio in the medium term. Given the property’s niche location within a food zone, we expect demand for space to be strong when such a development take place,” noted DBS.