Mapletree Industrial Trust proposes to acquire Tokyo freehold mixed-use property for JPY14.5 bil
Developed in October 1992, the building rests on freehold land measuring about 91,200 sq ft. The real estate has a gross floor surface location of around 319,300 sq ft.
The recommended procurement is anticipated to occur by the 4th quarter of 2024.
The property is currently fully rented to a Japanese group and has a measured average lease to expiry (WALE) of five years. The current contract is a traditional ordinary one where the renter has the selection to extend its contract.
According to MINT, the real estate remains in a strategic place, which presents a future redevelopment possibility that creates added value.
The center consists of an information facility, back office space, training facilities and an adjacent hotel wing that has the potential to be redeveloped right into a multi-storey information centre.
“End-users and information centre operators have expanded right into new data hub collections across Greater Tokyo because the restraints of land and power and the need for better redundancy. These led to West Tokyo becoming a bigger submarket, that represented about 40% of complete live IT supply in Greater Tokyo market,” the REIT supervisor describes in its Sept 30 announcement.
The consideration stands for a price cut of some 3.3% to the real estate’s appraisal of JPY15.0 billion. The property was on their own valued by JLL Morii Valuation & Advisory K.K.
The recommended acquisition is secured under the conditional trust beneficiary interest rate acquisition and stake contract with Nagayama Tokutei Mokuteki Kaisha, an unrelated third-party vendor. Under the framework, MINT is going to have an effective economic interest of 98.47% in the real property with a procurement outlay of JPY14.9 billion. The balance of the purchase factor will certainly be funded by MINT’s sponsor, Mapletree Investments.
In addition, the suggested acquisition catches chances in Japan, which has over 5,000 megawatts of whole IT supply and is Asia-Pacific’s (APAC) third-largest information facility market.
Adhering to the suggested procurement, MINT will have 65.9% of freehold properties in its profile, up from the percentage of 65.8% as at June 30. Its portfolio will grow to $9.1 billion by assets under management (AUM) up from $9.0 billion as at the exact same duration.
With strong demand and restricted supply growth, the information centre area is expected to expand at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2033, says MINT’s supervisor referring to stats from DC Byte’s Japan information centre market record for this year. The same report notes that the openings price is expected to tighten up to 6% by 2033, from 9% in 2023 and 23% in 2018.
On a historic pro forma basis, the suggested purchase and its proposed strategy of financing are going to be accretive to MINT’s distribution per unit (DPU). The manager intends to fund the total price through Japanese yen (JPY)-denominated borrowings to “offer a natural capital hedge”. MINT’s aggregate leverage ratio is anticipated to increase to 39.8% from 39.1% as at June 30.
Mapletree Industrial Trust (MINT) is recommending to acquire a multi-storey mixed-use establishment in Tokyo, Japan for JPY14.5 billion ($129.8 million).
It will also enhance MINT’s geographical diversification with its Japan portfolio up by 1.3 percentage 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% specifically.
