SINGAPORE (Jan 22): Mapletree Logistics Trust (MLT) is acquiring DC Deokpyung, a logistics property in South Korea, for 35.8 billion Korean won ($41.4 million), the manager announced on Wednesday.

The property is located in Yongin-Icheon, a prime logistics cluster in the south-east region of the Seoul Metropolitan Area, which is the largest logistics hub in South Korea, accounting for 70% of the country’s total warehouse supply.

Comprising four blocks of dry warehouses, the property has a total gross floor area of 30,485 sqm sited on freehold land of approximately 45,935 sqm.

The property is currently leased to ATN, a domestic third-party logistics service provider, and Seha Corporation, a domestic distributor and manufacturer of commercial packaging paper.

The leases have a weighted average lease term to expiry of 6.2 years with built-in annual rental escalations.

The property has been valued at 38.7 billion Korean won by Colliers International (Hong Kong) as at Dec 31, 2019.

The initial net property income (NPI) yield is 5.5%, with potential for growth when new leases are signed.

Based on the purchase price, the acquisition is expected to generate stabilised NPI yield of 6.4%. It is also expected to be accretive at the distribution level.

To be funded by debt, the acquisition is expected to be completed by 1QCY2020.

Upon completion, MLT’s aggregate leverage ratio will be approximately 37.4%.

Units in MLT closed 1 cent lower at $1.81 on Wednesday, before the announcement.