Mapletree Logistics Trust (MLT) announced last evening that it has proposed to acquire a warehouse facility (Mapletree Shah Alam Logistics Park) in Shah Alam, Malaysia, from its sponsor Mapletree Investments Pte Ltd, for a purchase consideration of MYR160m (~S$53.2m).

This comes in lower than the MYR173m average valuation on the property provided by two independent valuers. Mapletree Shah Alam Logistics Park consists of three single-storey blocks of multi-tenanted logistics and warehousing facility with mezzanine offices attached. It is fully leased to international 3PLs including XPO Worldwide Logistics, Pantos Logistics and YCH DistriPark.

The leases have a WALE of 1.7 years (by NLA). MLT expects the property to contribute an initial NPI yield of 7.5% and will fund the purchase by proceeds raised from its recent issuance of S$250m of perpetual securities. Completion is estimated to take place by Nov this year.

We maintain our HOLD rating and S$1.02 fair value on the stock.

Source: OCBC Research - 29 Jun 2016