Singapore-listed industrial REIT Mapletree Logistics Trust (MLT) (SGX:M44U ) announced on 26 May that it has entered into a sale and purchase agreement with Daehwa Logistics Co. Ltd for the acquisition of Daehwa Logistics Centre for KRW25.5 billion (SGD31.2 million).

Ng Kiat, CEO of the manager for MLT describes the proposed acquisition as being in alignment with the REIT’s strategy to rebalance its portfolio towards the higher growth markets.

“The logistics industry in South Korea is expected to continue to grow and develop further, especially with the government’s efforts to promote the third party logistics sector”, said Ng. “This latest addition of Daehwa Logistics Centre, a new facility with modern specifications located in a prime logistics hub in Seoul, will further strengthen our presence in South Korea”, she added.

Daehwa Logistics Centre is a three-storey Grade A dry warehouse with a gross floor area of approximately 25,600 square metres. The property was completed in December 2013 and is fully occupied by three tenants - e-commerce giant eBay, golf equipment company Acushnet and logistics company Daehwa.

The leases have a weighted average lease term to expiry (WALE) of 3.5 years with built-in annual rental escalations for 70% of the leased area.

At the purchase consideration of KRW25.5 billion, the Daehwa Logistics Centre will provide an initial net property income (NPI) yield of 8.3% and is expected to be DPU-accretive.

The acquisition will be funded by debt and is expected to be completed by July 2014. Upon completion, MLT’s aggregate leverage ratio is expected to increase to 33.8% from 33.3% as at 31 March 2014. MLT’s total portfolio will increase to 112 properties with a book value of SGD4.27 billion.

Units of MLT closed the trading day at SGD1.16 on the Singapore Exchange.