Investment Rationale

Capturing India’s Logistics Growth:
India is the world’s fifth largest economy and among the fastest growing. IMF forecasts robust GDP growth of 6.6% in 2025 and 6.2% in 2026. This growth is fueled by strong domestic consumption and a rapidly expanding middle class, with logistics infrastructure demand expected to scale alongside industrial and consumption growth. The low GDP per capita compared to China and Vietnam indicates significant room for further expansion, making the logistics sector a compelling long-term bet.

Prime Location and Connectivity:
The property is in Bhiwandi, Mumbai’s most established warehousing sub-market. It offers excellent connectivity via major expressways (NH-48, NH-160, Samruddhi Mahamarg), proximity to India’s largest container port (Jawaharlal Nehru Port), and both the existing airport and the upcoming Navi Mumbai International Airport. The warehouse is within a toll-free zone, providing cost advantages to tenants. Upcoming infrastructure projects like the Virar-JNPT Expressway and the Western Dedicated Freight Corridor (completion by March 2026) are expected to further enhance connectivity and reduce transit times.

High-Quality Specifications and Green Features:
The facility comprises two blocks of single-storey logistics space, completed in August 2025. It boasts modern Grade A specifications, including 12.5-metre floor-to-ceiling height, 70 kN/sqm floor loading capacity, FM2 floor flatness, and a fire sprinkler system. IGBC Gold pre-certification highlights its sustainability, featuring full LED lighting, roof skylights, insulation, and readiness for future solar panel installation.

Strong Tenancy Profile:
The warehouse is fully leased to two major listed online food and grocery delivery companies. Both tenants have invested heavily in cold-storage fit-outs, signaling long-term operational commitment. The WALE of 3.9 years includes built-in annual rent escalations, providing visibility and stability of rental income.

Portfolio Impact:
This acquisition further diversifies MLT’s portfolio, increasing its exposure to India. Post-acquisition, India’s contribution to Assets Under Management rises from 1.1% to 1.7% and Gross Revenue from 1.1% to 1.7%. The enlarged portfolio maintains a healthy lease expiry profile and land tenure stability, with the weighted average lease term to expiry unchanged at 37.3 years (excluding freehold land).

Financial Impact:
The acquisition is expected to be DPU accretive and will be funded by debt. The aggregate leverage ratio is projected to rise slightly to 40.9%, remaining within prudent limits. Completion is targeted for 4Q FY25/26, subject to regulatory and legal conditions.

Important Considerations for Shareholders & Potential Price Sensitivity

• Expansion into India: This marks a significant step in MLT’s strategic diversification and growth in a high-potential market. Investors may view this positively given India’s strong economic outlook and logistics sector fundamentals.
• Portfolio Diversification: The increase in India’s share of AUM and revenue may reduce concentration risk and provide exposure to a fast-growing market.
• Strong Tenant Profile: Full occupancy with reputable, listed tenants and built-in rental escalations enhances income visibility and stability.
• Leverage and Funding: While leverage increases slightly, it remains within comfortable levels. Investors should monitor this for future acquisitions and market changes.
• Completion Risks: The acquisition is subject to regulatory and other conditions, which could impact timing or completion.
• Green Credentials: Sustainability features may attract ESG-focused investors and tenants, potentially enhancing long-term value.
• DPU Accretion: The acquisition is expected to be DPU accretive, which may positively influence investor sentiment and share price.

Conclusion

Mapletree Logistics Trust’s proposed acquisition of a Grade A warehouse in Mumbai represents a strategic move to capture growth in India’s expanding logistics market. The property’s prime location, high-quality specifications, strong tenant profile, and sustainability credentials position it well for long-term income generation. The deal is expected to be DPU accretive, with manageable impact on leverage. Shareholders should monitor the completion timeline and subsequent performance as this acquisition could be a catalyst for MLT’s share price, given its potential to enhance portfolio value and reduce risk through diversification.

Disclaimer:
This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell units in Mapletree Logistics Trust. Investors are advised to conduct their own research and consult with financial advisors before making investment decisions. Forward-looking statements are subject to risks and uncertainties, and actual outcomes may differ materially from those expressed herein.

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