Mapletree Industrial Trust - UOB Kay Hian 2024-10-03: Further Expansion In Japan With Potential For Redevelopment

• Mapletree Industrial Trust (SGX:ME8U) has entered into a sale & purchase agreement to acquire an effective interest of 98.47% in a mixed-use facility in West Tokyo, Japan for ¥14.5b (S$129.8m), which represents a discount of 3.3% to the independent valuation of ¥15.0b.

Continuing to enlarge scale in Japan.

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• back office and training facilities (48%), and
• an adjacent accommodation wing (24%).
• Mapletree Industrial Trust’s exposure to Japan is expected to increase from 5.1% to 6.4% of AUM after the acquisition.

West Tokyo is a key data centre hub within Greater Tokyo.

• The property sits on a 91,200sf freehold site within a network-dense location at Tama-shi, West Tokyo and has a gross floor area (GFA) of 319,300sf.
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A rare opportunity for redevelopment in land-scarce Tokyo.

• According to DC Byte, demand for data centre space in Greater Tokyo is projected to grow at a CAGR of 9.3% from 2023 to 2033. Take-up for data centre space is driven by cloud service providers through wholesale colocation and build-to-suit projects. Vacancy rate in West Tokyo has compressed from 23% in 2018 to 9% in 2023 due to strong demand and limited supply.
• There is limited opportunity for developing new data centre(s) due to constraints of land and power. Vacancy rate is expected to tighten further to 6% by 2033.

Potential to enhance yield through redevelopment.

• Read more at SGinvestors.io.

Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-10-03 SGinvestors.io

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