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3 REITs Are Embarking On Acquisition Spree

Key Highlights:

  • Mapletree Industrial Trust, Mapletree Logistics Trust and Keppel DC REIT are embarking on an acquisition spree

  • Both Mapletree Industrial Trust and Keppel DC REIT are acquiring data centres which are yield accretive to the portfolios

  • Mapletree Logistics Trust is buying a warehouse in Melbourne

Mapletree Industrial Trust (MINT)

Source: Mapletree Industrial Trust homepage

Together with its sponsor, MINT formed a 50:50 joint venture to acquire 10 data centres from NYSE-listed REIT Digital Realty. The total acquisition is worth US$557.3m. Besides, the joint venture entity, Mapletree Rosewood Centre Trust and Digital Realty would co-invest in three fully fitted data centres for US$810.6m.

Why the acquisitions are attractive

  1. The 13 properties spread across North America enjoy 100% occupancy with a weighted average lease of 9.1 years.

  2. More than 92% of the leases have annual fixed rental escalations of 2%

  3. 12 out of the 13 properties are freehold

  4. The acquisitions will boost MINT's yield by 3.5% and NAV per share by 3.3%

Keppel DC REIT

Source: Keppel DC REIT homepage

Keppel DC REIT is acquiring 99% interest in Keppel DC Singapore 4 for $384.9m and 100% interest of 1-Net North Data Centre for $200.2m

Why the acquisitions are attractive

  1. The acquisition will boost its portfolio by 30.7% to $2.58b, with 17 data centres globally

  2. The occupancy rate is improved to 94.1% from 93.2%, with an average weighted lease of 8.9 years (pre-acquisition is 7.8 years)

  3. Both the properties are expected to be yield accretive

Mapletree Logistics Trust (MLT)

Source: Mapletree Logistics Trust homepage

MLT has entered into a conditional forward agreement to acquire a warehouse in Truganina, Melbourne for $17.4m. The property is estimated to yield a net property income of 6.3%. And it will be funded by debt, which will increase its gearing by 0.1% to 36.9%.

We will be doing some portfolio rebalancing soon. Premium subscribers will receive email notification once the trade is confirmed.

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