Mapletree Industrial Trust proposes to acquire Tokyo freehold mixed-use property for JPY14.5 bil
Developed in October 1992, the property rests on freehold land determining around 91,200 sq ft. The building has a gross floor area of around 319,300 sq ft.
“End-users and information centre operators have expanded into new data hub clusters throughout Greater Tokyo because the constraints of land and power and the demand for better redundancy. These caused West Tokyo coming to be a larger submarket, which made up around 40% of total live IT supply in Greater Tokyo market,” the REIT manager explains in its Sept 30 news.
It will also improve MINT’s geographical diversification 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 certainly represent 47.3% and 46.3% specifically.
On top of that, the suggested procurement captures possibilities in Japan, that has more than 5,000 megawatts of total IT supply and is Asia-Pacific’s (APAC) third-largest information center market.
With solid need and minimal supply growth, the data centre area is assumed to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2033, states MINT’s supervisor referring to data from DC Byte’s Japan data centre market record for this year. The same report notes that the openings price is expected to tighten to 6% by 2033, from 9% in 2023 and 23% in 2018.
Mapletree Industrial Trust (MINT) is proposing to get a multi-storey mixed-use facility in Tokyo, Japan for JPY14.5 billion ($129.8 million).
The establishment includes a data facility, back office, training establishments and a nearby accommodation wing that has the potential to get redeveloped into a multi-storey data centre.
The recommended procurement is assumed to happen by the fourth quarter of 2024.
The property is currently totally rented to a Japanese corporation and has a weighted standard lease to expiration (WALE) of 5 years. The current rent is a traditional ordinary one where the occupant has the choice to renew its lease.
On a historic pro forma basis, the suggested procurement and its proposed approach of financing will be accretive to MINT’s distribution per unit (DPU). The manager plans to fund the overall expense via Japanese yen (JPY)-denominated borrowings to “provide a natural funding hedge”. MINT’s aggregate leverage proportion is expected to boost to 39.8% from 39.1% as at June 30.
According to MINT, the real estate remains in a strategic site, which offers a future redevelopment chance that develops added worth.
Following the suggested acquisition, MINT is going to have 65.9% of freehold real properties in its portfolio, up from the proportion of 65.8% as at June 30. Its profile will develop to $9.1 billion by assets under management (AUM) up from $9.0 billion as at the same period.
The consideration represents a price cut of some 3.3% to the property’s valuation of JPY15.0 billion. The property was alone valued by JLL Morii Valuation & Advisory K.K.
The proposed purchase is secured under the conditional trust beneficiary interest acquisition and stake contract with Nagayama Tokutei Mokuteki Kaisha, an unassociated third-party vendor. Under the structure, MINT will have a reliable financial interest of 98.47% in the real property with a purchase outlay of JPY14.9 billion. The balance of the purchase factor will be funded by MINT’s sponsor, Mapletree Investments.
