Singapore-listed industrial REIT Mapletree Logistics Trust (MLT) (SGX:M44U) announced late on 21 November that it will be acquiring a three-storey dry warehouse in South Korea, Smart Logistics Centre, for KRW21.4 billion (SGD25.2 million).

The property has a gross floor area of about 19,300 sqm and equipped with direct ramp access to all three floors. Smart Logistics Centre is 100% leased to Smart Logistics and Smart Global, two Korean logistics operators which are related to the vendor. The leases have a weighted average lease term to expiry (WALE) of 4.7 years with built-in annual rental escalations.

The acquisition, which is expected to generate an initial net property income yield of approximately 7.8% and be DPU-accretive, has been described as being in line with the REIT’s investment strategy to rebalance its portfolio towards the higher growth markets and to expand its presence in South Korea.

“With its modern specifications and good location in Korea’s first and largest fashion distribution park, this acquisition will strengthen our market position to 10 properties in Gyeonggi-do, South Korea’s prime logistics hub”, said Ng Kiat, CEO of the REIT’s manager.

The acquisition will be funded by debt and is expected to be completed by December 2014. Upon completion, MLT’s aggregate leverage ratio will be approximately 35.5%, while MLT’s total portfolio will increase to 117 properties with a book value of approximately SGD4.4 billion.