Mapletree Industrial Trust proposes to acquire Tokyo freehold mixed-use property for JPY14.5 bil
Mapletree Industrial Trust (MINT) is recommending to obtain a multi-storey mixed-use establishment in Tokyo, Japan for JPY14.5 billion ($129.8 million).
Following the proposed purchase, MINT is going to have 65.9% of freehold real estates in its profile, up from the proportion of 65.8% as at June 30. Its portfolio will certainly expand to $9.1 billion by assets under management (AUM) up from $9.0 billion as at the very same duration.
According to MINT, the property remains in an important place, which offers a future redevelopment opportunity that develops added value.
The suggested acquisition is projected to happen by the 4th quarter of 2024.
On a historical pro forma basis, the proposed procurement and its proposed strategy of financing will be accretive to MINT’s distribution per unit (DPU). The manager means to fund the complete expense via Japanese yen (JPY)-denominated borrowings to “provide a natural resources hedge”. MINT’s aggregate leverage ratio is anticipated to boost to 39.8% from 39.1% as at June 30.
The estate is currently completely contracted to a Japanese conglomerate and has a measured common lease to expiry (WALE) of five years. The existing lease is a traditional regular one where the renter has the choice to continue its contract.
With strong demand and minimal supply development, the data centre space is assumed to expand at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2033, states MINT’s manager pertaining to data from DC Byte’s Japan data centre market record for this year. The similar report notes that the openings rate is expected to tighten up to 6% by 2033, from 9% in 2023 and 23% in 2018.
Built in October 1992, the property remains on freehold land measuring approximately 91,200 sq ft. The building has a gross floor area of around 319,300 sq ft.
The suggested purchase is made under the conditional trust beneficiary interest acquisition and stake agreement with Nagayama Tokutei Mokuteki Kaisha, an unconnected third-party supplier. Under the structure, MINT is going to have an efficient financial interest of 98.47% in the real estate with a procurement expense of JPY14.9 billion. The balance of the acquisition factor will be financed by MINT’s supporter, Mapletree Investments.
It will definitely also improve MINT’s geographical diversity with its Japan profile up by 1.3 percent points to 6.4% from 5.1% as at June 30. MINT’s Singaporean and North American buildings will certainly stand for 47.3% and 46.3% respectively.
The establishment includes an information facility, back workplace, training facilities and a nearby accommodation wing that has the plausible to get redeveloped right into a multi-storey information centre.
Additionally, the proposed procurement catches opportunities in Japan, which has more than 5,000 megawatts of total IT supply and is Asia-Pacific’s (APAC) third-largest data center market.
The consideration represents a discount rate of some 3.3% to the real estate’s appraisal of JPY15.0 billion. The real estate was independently valued by JLL Morii Valuation & Advisory K.K.
“End-users and data centre operators have broadened right into brand-new data centre clusters across Greater Tokyo because the restraints of land and power and the requirement for higher redundancy. These resulted in West Tokyo ending up being a bigger submarket, which represented about 40% of total live IT supply in Greater Tokyo market,” the REIT supervisor describes in its Sept 30 announcement.
