The latest acquisition includes an Automated Storage and Retrieval System (ASRS) to meet the growing demand for automated warehouses. The 10-year lease of the property to a logistics operator will enhance CLMT’s stable revenues.
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The strategically located Elmina logistics hub is under development and is expected to be completed in the first half of 2025.
CapitaLand Malaysia Trust (CLMT) has signed an agreement to acquire a freehold automated logistics property from PTT Logistics Hub 1 Sdn. Bhd. for RM180.0 million. The property, Elmina Logistics Hub, is located in Elmina Business Park, an established industrial and commercial park in Selangor. The purchase price is in line with the independent stock market valuation1 of RM180.5 million commissioned by MTrustee Berhad (the trustee of CLMT).
This acquisition should contribute positively to CLMT’s revenues. The distribution per share is accretive on a pro forma basis. Elmina Logistics Hub is expected to generate an annual gross rental of RM12.3 million, with a first-year gross yield of about 6.8%.
The construction of the Elmina Logistics Center is expected to be completed in the first half of 2025. After signing the sale and purchase agreement, CLMT will also enter into a rental agreement to fully lease the property to Projek Tetap Teguh Sdn. Bhd., an indirect wholly-owned subsidiary of PTT Synergy Group Berhad, a company listed on Bursa Malaysia. The 10-year lease term, with built-in rent increases, is expected to provide revenue stability for CLMT’s portfolio.
Elmina Logistics Hub is a 40 meter high, single-story automated warehouse equipped with ASRS. An integral part of modern warehouse management, ASRS is a computer-controlled system that uses cranes and robots to efficiently automate the placement and retrieval of goods. By streamlining logistics operations, ASRS helps optimize warehouse space, improve speed and accuracy, and reduce labor costs and human errors. The property has 19 loading docks with hydraulic dock levelers and is capable of handling over 30,000 pallets.
Mr. Tan Choon Siang, CEO of CapitaLand Malaysia REIT Management Sdn. Bhd. (CMRM), the director of CLMT, said: “The acquisition of our first modern automated logistics property allows CLMT to capitalize on the growing demand for such assets which enable customers to improve operational efficiencies, maximize space utilization and reduce the use of manual tools. work. CLMT’s strategic evolution fills the current market gap in the area of automated warehouses, providing us with the opportunity to grow in this specialized segment. The long-term lease will also generate stable recurring revenue and improve the resilience of our portfolio.
“This transaction underlines our commitment to creating value by expanding CLMT’s portfolio with high-quality assets offering stable recurring income. Through a long-term lease, the acquisition strengthens our industrial and logistics tenant base and improves the overall resilience of the CLMT portfolio. Stepping up our portfolio rejuvenation efforts, we have announced investments of nearly RM330 million in industrial and logistics assets since the expansion of CLMT’s investment mandate in 2021. We are confident that these acquisitions will further strengthen CLMT’s portfolio, positioning it for continued growth,” added Mr Tan.
Privileged location within an established logistics hub
Elmina Logistics Hub is strategically located within the Elmina Business Park, a modern 1,500-acre industrial and commercial park. This prime location provides excellent connectivity to major logistics routes in the Klang Valley including the North-South Expressway, Guthrie Corridor Expressway, North Klang Valley Expressway, Damansara-Shah Alam Elevated Expressway and the Kuala Lumpur-Kuala Selangor. Its strategic location ensures seamless access to major transport routes, facilitating efficient logistics and distribution.
(Right to left) Tan Choon Siang, CEO of CMRM with Teo Swee Phin, Managing Director of PTT Synergy Group Bhd
Expands logistics portfolio with high quality asset
The addition of Elmina Logistics Hub will expand CLMT’s portfolio to 11 properties, increasing the proportion of its new economy assets from 3% to 6% of its total portfolio by assets under management. CLMT currently owns two fully leased logistics properties: Glenmarie Distribution Centre, located in Hicom-Glenmarie Industrial Park in Shah Alam, and Valdor Logistics Centre, located in one of Penang’s major industrial hubs. CLMT also announced the acquisition of three freehold industrial factories in Nusajaya Tech Park in Johor2.
Financing of the acquisition
CLMT paid 10% of the purchase price upon signing the Conditional Sale and Purchase Agreement (CSPA). The remaining balance will be paid upon completion of construction of the property and issuance of the Certificate of Completion and Compliance under the terms of the ACPS. CLMT intends to finance the acquisition through existing debt facilities. Following the transaction, CLMT’s pro forma gearing will increase from 42.1% to 44.1%, which remains below the regulatory limit of 50%. Completion of the acquisition is expected in the fourth quarter of 2025.
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Remarks
(1) The independent appraisal carried out by JLL Appraisal & Property Services Sdn. Bhd. said the market value of the property was RM180.5 million as at Nov 15, 2024.
(2) On February 5, 2024, CLMT announced the acquisition of three freehold ready-to-use factories in Nusajaya Technology Park, Iskandar Malaysia, Johor, for RM27 million.
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