Mapletree Industrial Trust Proposes Acquire Tokyo Freehold Mixed Use Property Jpy145 Bil
Mapletree Industrial Trust (MINT) has announced its plans to acquire a multi-storey mixed-use facility located in Tokyo, Japan for a total of JPY14.5 billion ($129.8 million). The acquisition is being made under a conditional trust beneficiary interest purchase and share agreement with Nagayama Tokutei Mokuteki Kaisha, a third-party vendor that is not affiliated with MINT.
Nestled in Clementi Avenue 1, the Elta Condo boasts a modern design and an impressive assortment of top-of-the-line facilities. However, what truly sets it apart is its strategic location near some of the most esteemed educational institutions in Singapore. It’s the ideal choice for families who prioritize education, as there are numerous reputable primary, secondary, and tertiary schools just a stone’s throw away. Residents of Elta Condo can provide their children with exceptional learning opportunities without having to travel far. For an up-close experience, be sure to visit the Elta Showflat. Elta Showflat provides an opportunity to see for yourself the impressive features of this condominium.
Once completed, MINT will have an effective economic interest of 98.47% in the property, with an acquisition cost of JPY14.9 billion. The remaining balance of the purchase price will be funded by MINT’s sponsor, Mapletree Investments.
This building was constructed in October 1992 and is situated on freehold land measuring approximately 91,200 sq ft. It has a total gross floor area of 319,300 sq ft.
The property is currently fully leased to a Japanese conglomerate and has a weighted average lease to expiry (WALE) of five years. The existing lease is a traditional regular one with the option for the tenant to renew.
According to MINT, the property’s strategic location presents a potential future redevelopment opportunity that could add significant value. The facility includes a data centre, back office, training facilities, and an adjacent accommodation wing that has the potential to be redeveloped into a multi-storey data centre.
MINT’s manager explains that the demand for data centre space in Tokyo has been strong, with limited supply growth. As a result, the data centre space is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2033. Furthermore, the vacancy rate is expected to tighten to 6% by 2033, from 9% in 2023 and 23% in 2018, according to DC Byte’s Japan data centre market report for this year.
The proposed acquisition also provides opportunities for MINT to enter the Japanese market, which is the third-largest data centre market in the Asia-Pacific region, with over 5,000 megawatts of total IT supply.
After the acquisition, MINT’s portfolio will increase to $9.1 billion in assets under management (AUM), up from $9.0 billion as of June 30. It will also improve MINT’s geographical diversification, with its Japan portfolio accounting for 6.4% of its portfolio, up from 5.1% as of June 30. MINT’s Singapore and North American properties will represent 47.3% and 46.3%, respectively.
On a historical pro forma basis, the proposed acquisition is expected to be accretive to MINT’s distribution per unit (DPU). The manager intends to finance the acquisition through Japanese yen (JPY)-denominated borrowings to provide a natural capital hedge. MINT’s aggregate leverage ratio is expected to increase to 39.8% from 39.1% as of June 30.
The purchase price represents a discount of approximately 3.3% to the property’s valuation of JPY15.0 billion, which was independently valued by JLL Morii Valuation & Advisory K.K.
The proposed acquisition is expected to be completed by the fourth quarter of 2024.