Mapletree Logistics Trust to acquire Iskandar industrial warehouse for S$34.3m

NPI yield expected at around 8.4%.

Mapletree Logistics Trust (MLT) proposed to acquire an industrial warehouse in Iskandar Malaysia last Friday.

Based on the purchase price of RM$88.5m (~S$34.3m), the initial NPI yield of the property is expected to be ~8.4%, according to OCBC Investment Research.

Notably, this is higher than the implied yield of 7.1% for MLT’s existing Malaysia portfolio.

The research firm also estimates that the income from the asset will add 0.1 S cents to MLT’s DPU on an annualised basis, thus making the deal DPU-accretive.

Management intends to fund the acquisition wholly by debt, which should see its aggregate leverage increase marginally by 0.5ppt to 34.9% upon completion.

"However, we do not expect any near-term impact to its DPU and gearing given that the transaction is projected to complete by 3QFY15 (Dec 2014)," said OCBC Investment Research.