Daiwa House Logistics Trust in maiden Japanese buy

Daiwa House Logistics Trust (DHLT) is proposing to acquire a portfolio of two logistics facilities and a piece of freehold land in Japan for a total consideration of 4.68 billion yen (Rm148mil).

In a filing, the real estate investment trust (REIT) manager estimated this to represent an 11.8% discount to the properties’ average appraised value.

The REIT manager believes enlarging its portfolio with this acquisition will broaden DHLT’S earnings base and diversify its portfolio across various regions in Japan to mitigate potential concentration risk, as well as potential impacts to the portfolio from earthquakes.

“The strategically located quality portfolio is 100% freehold and is fully occupied by high-quality tenants including one of the largest integrated logistics companies in Japan.

“We believe that the proposed acquisition will enhance the quality of the existing portfolio,” commented Takeshi Fujita, chief executive of the REIT manager.

The REIT intends to finance the acquisition through a combination of bank borrowings as well as a proposed sponsor subscription of units in DHLT amounting to 1.25 billion yen (Rm41mil).

The subscription’s minimum issue price represents a premium of 14.9% to DHLT’S closing price as at Sept 20.

As the REIT’S maiden acquisition, it is expected to lift DHLT’S distribution per unit by about 1.3% on a pro-forma basis from the time of its Nov 26, 2021 listing up until June 30, 2022.

This is assuming both the proposed acquisition and sponsor subscription are completed on Dec 2, 2022.