APAC REIT Deals Report: June 2020

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One of the biggest deals of the month was Charter Hall Group’s (CHC) A$648m joint acquisition of a portfolio of Australian logistics assets with Allianz Real Estate.

The 50-50 JV deal comprised four ALDI distribution centres located in Sydney, Melbourne and Brisbane, which ALDI designed and built to high specifications. 

“Accessing the on-going growth and resilience of grocery retailing in Australia has been a consistent thematic driving the growth of our Industrial and Logistics portfolio toward $10bn and beyond, now representing 25% of our enlarged $40bn platform” said David Harrison, managing director and group CEO of Charter Hall.

Singapore-listed Mapletree Industrial Trust’s (ME8U) announced plans to buy the 60% remaining interest in 14 data centres in the US for US$210.9m. 

The deal was said to increase the REIT’s data centre exposure to 39% of assets under management and deepen its presence in the US. 

“The United States is the largest and most established data centre market in the world,” said Tham Kuo Wei, CEO of the REIT’s manager.

“It offers attractive growth prospects and is well supported by favourable supply-demand dynamics. The proposed acquisition will improve MIT’s income stability with the increased freehold land component and long leases with annual rental escalations.”

In Japan, Kenedix Office Investment Corp. (8972) said it was buying an office building in Tokyo’s Shimbashi area from Zao Properties for JPY 16.3bn. 

The 11-storey Shinbashi M-SQUARE Bright property has 5,392 sq.m. of leasable area, and is fully occupied with six tenants, according to a filing. 

Kenedix Office also revealed plans to sell three buildings to Mitsui Fudosan for about JPY 9.75bn.

BHG Retail REIT’s (BMGU) plans to buy Badaling Outlets in Beijing for S$455m were terminated due to COVID-19’s impact on the capital markets and the economy.

The REIT said cancelling the deal, which was first announced in December last year, wouldn’t have a material adverse impact on its net asset value or distributions for the 2020 financial year. 

Frasers Centrepoint Trust (J69U) doubled down on suburban retail after buying an additional 12% interest in the PGIM Real Estate AsiaRetail fund for S$197.2m, taking its stake to 36.89%.

“The ARF portfolio of suburban retail malls shares similar characteristics to FCT’s malls, which focuses on essential spending and F&B trades as well as their locations in populous residential areas and close proximity to transportation nodes,” Richard Ng, CEO of the REIT’s manager, said in a statement after the market had closed.

The REIT said the acquisition was accretive to its DPU “based on the assumption that the acquisition had been effected at the beginning of FY2019”, while pro forma gearing sat at 36.2% post-deal.

In Japan, Industrial & Infrastructure Fund Investment Corp. (3249) said it planned to acquire a 3% interest in IIF Shonan Health Innovation Park in Fujisawa-shi for JPY 1.16bn. 

The asset is one of Takeda Pharmaceutical’s largest research and development facilities in Japan. 

The sale-leaseback deal with Takeda Pharmaceutical features a 6.5% NOI yield, or a 6.2% yield after additional capex, the company said. 

Other deals included: 

  • Kuala Lumpur-listed Sunway REIT (5176) said it would buy the Pinnacle Sunway, a 24-storey office building in Sunway City, for RM450m.
  • Nippon Accommodations Fund Inc. (3226) announced plans to acquire a 70% stake in the Park Cube Oimachi Residence in Tokyo from ITOCHU Property Development for about JPY 4.1bn.
  • Aventus Group (AVN) acquired a 31,470 sq.m. development site in Melbourne from Kaufland Australia for A$11.5m, according to a statement. 
  • Mapletree Logistics Trust (M44U) announced the purchase of a second logistics facility in Brisbane for A$21.25m. The deal expanded MLT’s footprint in Australia to eleven assets, spanning 277,115 sq.m. of combined gross floor area. 
  • Hankyu Hanshin REIT Inc. (8977) said it acquired an additional part of the site of Takatsuki-Josai Shopping Center in Osaka for JPY 55m.
  • Lendlease Global REIT (JYEU) announced it had won a tender to redevelop the 48,200 sq.ft. Grange Road car park site in Singapore into a new S$10m multi-functional event space.