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Mapletree Logistics Trust (MLT) has agreed to buy Havi Logistics’ four-storey purpose-built food distribution centre in JTC Food Zone in the Pandan Loop industrial estate for S$34 million.
Known as 190A Pandan Loop (pictured), the property has a leasehold tenure of 40 years. Sited on a 8,500 sq m land, the building has a gross floor area (GFA) of about 10,400 sq m.
“With a limited supply of properties in the JTC Food Zones, 190A Pandan Loop is an attractive property given its good specifications, prime location and relatively long remaining tenure of 40 years, said Ng Kiat, CEO of Mapletree Logistics Trust Management.
“The asset also has an under-utilised plot ratio with the potential to double its GFA by way of future enhancement or redevelopment,” she added.
To fund this new acquisition, MLT has signed a memorandum of understanding with Nat Aire Builder & Distribution for the sale of a four-storey light industrial building in Upper Aljunied Industrial Estate for S$13.5 million.
Dubbed as 134 Joo Seng Road, the property has a GFA of around 7,100 sq m and its maximum allowable plot ratio of 2.5 has already been reached.
Although these two transactions are expected to have little effect on MLT, its earnings are forecasted to rise due to its larger presence in JTC food zone, according to DBS.
“We see significance from the manager’s continued strategy of actively managing its portfolio and divesting low-yielding assets, thus keeping MLT’s portfolio relevant and contemporary for end users.”
“Apart from steady earnings from the target asset (79 percent leased to high quality tenants with a WALE of 7.1 years), we see further earnings upside and returns from the potential doubling of the property’s GFA through maximizing unutilized plot ratio in the medium term. Given the property’s niche location within a food zone, we expect demand for space to be strong when such a development takes place,” it added.
Image source: Mapletree Logistics Trust
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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