Mapletree Logistics acquires new South Korea warehouse

Tenants, prepare for higher rents.

Mapletree Logistics (MLT) continues to drive itself deeper into the South Korean market, with its $31.2 million acquisition of the Daehwa Logistics Centre from vendor Daehwa Logistics Co Ltd.

Daehwa Logistics Centre is a three-storey Grade A dry warehouse of 25,600 sqm in the prime logistics hub in Seoul. Completed in 2013, the centre is currently being occupied by eBay, Acushnet and Daehwa.

The asset is expected to generate an initial NPI yield of 8.3%, and could add an annualized 0.05 cents to MLT’s DPU.

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We note that the acquisition is consistent with management’s guidance in April that it was performing the due diligence for a potential purchase of a Korea-based property. It is also in line with MLT’s strategy to rebalance its portfolio towards South Korea and other higher growth markets. Looking ahead, we believe MLT may turn to the China assets from its sponsor’s pipeline for further growth. However, pending any new development, we only factor in the acquisition of Daehwa Logistics Centre for now. Our fair value remains unchanged at $1.10.