Mapletree Industrial Trust proposes to acquire Tokyo freehold mixed-use property for JPY14.5 bil
The estate is currently totally rented to a Japanese group and has a weighted common lease to expiration (WALE) of 5 years. The present rent is a classic ordinary one where the occupant has the choice to continue its lease.
“End-users and data centre operators have actually expanded right into brand-new information centre clusters throughout Greater Tokyo in view of the constraints of land and power and the need for higher redundancy. These caused West Tokyo coming to be a larger submarket, which represented about 40% of overall live IT supply in Greater Tokyo market,” the REIT supervisor describes in its Sept 30 announcement.
Mapletree Industrial Trust (MINT) is recommending to acquire a multi-storey mixed-use establishment in Tokyo, Japan for JPY14.5 billion ($129.8 million).
Additionally, the suggested procurement captures options in Japan, that has more than 5,000 megawatts of overall IT supply and is Asia-Pacific’s (APAC) third-largest data center market.
The proposed procurement is secured under the conditional trust beneficiary interest acquisition and share agreement with Nagayama Tokutei Mokuteki Kaisha, an unconnected third-party vendor. Under the structure, MINT is going to have a reliable financial interest rate of 98.47% in the property with a procurement investment of JPY14.9 billion. The balance of the acquisition factor will certainly be funded by MINT’s sponsor, Mapletree Investments.
The center consists of a data facility, back office, training centers and a surrounding hotel wing that has the plausible to get redeveloped into a multi-storey information facility.
The proposed acquisition is expected to happen by the 4th quarter of 2024.
Adhering to the suggested acquisition, 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 certainly develop to $9.1 billion by assets under management (AUM) up from $9.0 billion as at the very same period.
According to MINT, the real estate is in a critical location, which presents a future redevelopment possibility that creates added value.
Norwood Grand City Developments Limited
It will certainly also boost MINT’s geographical diversity 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 estates will represent 47.3% and 46.3% respectively.
On a historical pro forma basis, the proposed purchase and its suggested approach of funding will be accretive to MINT’s distribution per unit (DPU). The supervisor plans to fund the total expense with Japanese yen (JPY)-denominated fundings to “offer an all-natural resources hedge”. MINT’s accumulation leverage ratio is assumed to increase to 39.8% from 39.1% as at June 30.
Developed in October 1992, the structure rests on freehold land determining about 91,200 sq ft. The building has a gross floor surface area of around 319,300 sq ft.
With strong need and limited supply growth, the information centre space is assumed to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2033, claims MINT’s supervisor pertaining to statistics from DC Byte’s Japan information centre market report for this year. The same report notes that the job rate is anticipated to tighten to 6% by 2033, from 9% in 2023 and 23% in 2018.
The factor stands for a price cut of some 3.3% to the property’s assessment of JPY15.0 billion. The property was on their own valued by JLL Morii Valuation & Advisory K.K.
