Mapletree Logistics Trust divests Japan assets

Proceeds could be used to pay off debt.

Mapletree Logistics Trust (MLT) recently announced the proposed divestment of two of its freehold properties, Zama Centre and Shiroishi Centre, in Japan to Godo Kaisha Asset Toshi Jigyo 4 Go for an aggregate sale consideration of JPY13.5b ($165.4m).

According to OCBC Investment Research analysts Wong Teck Ching Andy, this translates into an exit NPI yield of around 4.3% and an attractive premium of 32% and 10% above their latest combined valuation and purchase price of JPY10.2b and JPY12.3b, respectively.

MLT expects to recognise an estimated divestment gain of around JPY234m ($2.9m) over the original purchase cost after providing for taxes and transaction related expenses. This gain will be distributed to MLT’s unitholders.

"We factor in MLT’s Japan divestments in our model, and assume that the net proceeds would be largely used to pare down its existing debt. We also increase our occupancy assumptions for some of MLT’s properties," the analyst said.