SINGAPORE (Mar 28): Mapletree Greater China Commercial Trust (MGCCT) is expanding its property portfolio into Northern Asia.

The REIT is acquiring a 98.47% stake in a portfolio of six freehold commercial real estate assets in Japan for $753.4 million.

The Japan portfolio comprises six freehold office buildings, namely three in Tokyo, one in Yokohama and two in Chiba with a total GFA of 1.65 million sf and total NLA of 1.60 million sf.

The proposed acquisition is expected to contribute a NPI yield of 4.8% and be DPU accretive.

Upon completion of the acquisition which is subject to shareholders' approval, MGCCT will be renamed “Mapletree North Asia Commercial Trust”.

"The Proposed Acquisition is expected to result in income diversification with contribution from a new geographical location and a wider pool of tenant base, which will reduce the reliance of income contribution from any single property," says Mapletree Greater China Commercial Trust Management.

The trust manager says the office locations where the buildings are situated are well-established hubs with attractive micro-location characteristics. Situated close to busy train stations, public transportation nodes and major arterial roads, the properties provide good connectivity and are cost efficient office locations for our tenants.

The manager intends to finance the acquisition through a combination of debt and the proceeds from an equity fund raising although the details and timing have not been determined.

At an occupancy rate of 99.9%, the Japan portfolio is supported by leases with a WALE of 5.8 years and a tenant base of 21 tenants.

The agreed portfolio value of  approximately $782.8 million for the Japan portfolio was arrived at on a willing-buyer and willing-seller basis after taking into account the two sets of independent valuations of the portfolio.

MGCCT’s asset size will increase from $6.2 billion to $7.0 billion, while the Japan portfolio will contribute to 11% and 12% of the enlarged portfolio’s valuation and NPI respectively.

Units in MGCCT closed 2 cents higher at $1.18 on Tuesday.