Daiwa House Logistics Trust · SGX:DHLU
Daiwa House Logistics Trust — Merger or Acquisition (September 2022)
33 slides from Daiwa House Logistics Trust's merger presentation, Sep 21, 2022
Slide 1: Maiden Acquisition of Two Freehold Properties and A Freehold Land in Japan
Daiwa House Logistics Trust Maiden Acquisition of Two Freehold Properties and A Freehold Land in Japan 21 September 2022
Slide 2: Important Notice
Important Notice This Presentation is for information purposes only and does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any Units in Singapore or any other jurisdiction, nor should it or any part of it form the basis of, or be relied upo
Slide 3: Transaction Overview
Transaction Overview DPL Iwakuni 1 & 2
Slide 4: Maiden acquisition supported by Sponsor
Maiden acquisition supported by Sponsor • Proposed acquisition of: ✓ DPL Iwakuni 1 & 2 located in Chugoku Proposed ✓ D Project Matsuyama S located in Shikoku Acquisition ✓ Underlying freehold land of D Project Iruma S(1), located in Greater Tokyo (collectively, the “Target Portfolio” or “Target Prop
Slide 5: Acquisition of 2 properties and an underlying land
Acquisition of 2 properties and an underlying land JPY5,301.5m 2+1 100.0% (S$54.1m) High Quality Target Portfolio Aggregate Appraised Logistics Assets Occupancy(1) Value(1) JPY4,676.0m 20,808 sq m 4.0 Years (S$47.7m) Total Target Aggregate Purchase NLA Portfolio WALE(1,2) Consideration D Project Iru
Slide 6: Summary of Target Portfolio
Summary of Target Portfolio DPL Iwakuni D Project D Project Total 1&2 Matsuyama S Iruma S Land Greater Region Chugoku Shikoku - Tokyo DPL Iwakuni 1: Building 1: Date of September 2016 October 1994 - - Construction DPL Iwakuni 2: Building 2: March 2020 July 2017 Land Tenor Freehold Freehold Freehold
Slide 7: Growing DHLT portfolio
Growing DHLT portfolio Portfolio Valuation Total NLA (sq m) Portfolio Occupancy (%)(2) (millions)(1) JPY86,371.5 +4.9% 444,728 98.6% Remain 98.6% +6.5% (S$881.3) 423,920 high JPY81,070.0 (S$827.2) Pre Transactions Post Transactions Pre Transactions Post Transactions Pre Transactions Post Transaction
Slide 8: Strong Support from Sponsor
Strong Support from Sponsor Total Acquisition acquisition Issuance of Fee cost Acquisition S$56.2 mn Fee Units Refundable S$56.2 mn Consumption 0.5 0.5 Consumption 2.4 2.1 Tax(1) Tax Loan Transaction 5.6 Expenses and others External Debt ✓ Sponsor will subscribe for (excluding 40.8 Consumption Units
Slide 9: Rationale and Benefits
Rationale and Benefits D Project Matsuyama S
Slide 10: Proposed Acquisition benefits DHLT and its Unitholders
Proposed Acquisition benefits DHLT and its Unitholders DPU accretive acquisition Fundamentals in Japan logistics market remain sound Acquisition of high-quality properties Further diversification of portfolio Reinforces Sponsor commitment and confidence 9
Slide 11: Delivering a sustainable DPU-accretive acquisition
Delivering a sustainable DPU-accretive acquisition ✓ DPU accretion of 1.3% achieved whilst maintaining a prudent capital management for sustainable returns ✓ DHLT to benefit from relatively low borrowing costs in Japan ✓ Proposed loan facilities to be fully hedged JPY loan with interest rate fixed f
Slide 12: Japan logistics market fundamentals remain sound
Japan logistics market fundamentals remain sound ✓ Demand for logistics space in Japan has been robust for the past several years resulting in low vacancy rates and growing rent in general ✓ Even as supply increased over recent years and expected to increase in the future, modern logistics facilitie
Slide 13: E-commerce and 3PL to continue driving demand
E-commerce and 3PL to continue driving demand ✓ Japan’s e-commerce sales, at 8.1% of ✓ Increasing focus by companies to total retail sales, is far lower compared to outsource logistics process and supply other developed e-commerce markets, chain management to achieve an efficient implying potential
Slide 14: Strategic location – DPL Iwakuni 1 & 2
S Strategic location – DPL Iwakuni 1 & 2 Close access to Hiroshima City, the largest city in Chugoku area Easy access to Sanyo Expressway via nearby Iwakuni Interchange The property is located in Iwakuni Located within city, which has 10.0 km radius played an important from Iwakuni role as a part of
Slide 15: Strategic location – D Project Matsuyama S
S Strategic location – D Project Matsuyama S Matsuyama Airport and Matsuyama Port both located within a 15.0 km radius Easy access to Matsuyama Expressway via nearby Matsuyama Interchange The property is located in the same area as the logistics bases of regional logistics companies and food-related
Slide 16: Strategic location – D Project Iruma S
S Strategic location – D Project Iruma S Easy accessibility via various expressways and national routes nearby The property is located in an area with several large- scale industrial parks serving as manufacturing bases for the Tokyo metropolitan area The property is approximately 50 km from central
Slide 17: Addition of high quality facilities to portfolio
Addition of high quality facilities to portfolio ✓ DPL Iwakuni 1 & 2 is a modern logistics facility developed with high specifications, and comprises two relatively new buildings completed in 2016 and 2020 ✓ D Project Matsuyama S is developed to cater for the specific needs of its tenant and compris
Slide 18: Strengthens portfolio resilience with freehold assets
Strengthens portfolio resilience with freehold assets ✓ The Target Properties are all freehold ✓ Acquisition of D Project Iruma S Land will properties better preserve the value of D Project ✓ On a pro forma basis, the proportion of Iruma S as it will be converted to a freehold properties (by NLA) of
Slide 19: Enhancing resilience through quality tenants
Enhancing resilience through quality tenants ✓ The two properties are fully occupied as at 30 June 2022, and are leased to quality tenants, including listed companies ✓ Such tenants include one of the largest integrated logistics companies in Japan, as well as a leading integrated food trading compa
Slide 20: Acquisition in line with DHLT sustainability efforts
Acquisition in line with DHLT sustainability efforts ✓ DPL Iwakuni 1 & 2 is a certified green building by Building Energy-efficiency Labelling System (“BELS”), rated 5 stars (highest rating under BELS) ✓ Based on the Enlarged Portfolio, the proportion of properties that are certified green will rema
Slide 21: Further diversification of DHLT Portfolio
Further diversification of DHLT Portfolio ✓ Following the completion of the Proposed ✓ Portfolio further diversified across Acquisition, no single property account various regions in Japan, mitigating for more than 25% of the total concentration risk in a single region valuation D Project Matsuyama
Slide 22: Lowers reliance on any single tenants
Lowers reliance on any single tenants ✓ DHLT will also have a wider pool of tenants which reduces its reliance on any single tenant. As at 30 June 2022 (Current) As at 30 June 2022 (Enlarged Portfolio) % of % of Tenant Tenant NPI (1) NPI (1) 1 Mitsubishi Shokuhin 19.8 1 Mitsubishi Shokuhin 19.3 2 Su
Slide 23: Acquisition at an attractive discount
Acquisition at an attractive discount ✓ The purchase consideration represents an attractive discount of 11.8% to Aggregate Appraised Value of S$54.1 million ✓ The attractive discounts show the Sponsor’s strong commitment to DHLT’s growth ✓ Blended implied NPI yield for DPL Iwakuni 1 & 2 and D Projec
Slide 24: Issue price underscores Sponsor's confidence
Issue price underscores Sponsor’s confidence ✓ The Sponsor will support the fund raising for the proposed acquisition by subscribing for the New Units at the higher of (i) S$0.77 per Unit or (ii) the 10-Day VWAP ✓ Based on the minimum issue price of S$0.77 per new Unit, it is equivalent to the adjus
Slide 25: Summary
Summary D Project Iruma S
Slide 26: Key Takeaways
Key Takeaways DPU accretive acquisition - DPU accretion of 1.3% - Post-acquisition gearing remains healthy at 36.4% Fundamentals in Japan logistics market remain sound - Demand expected to remain healthy supported by 3PL and e- commerce sector Acquisition of high-quality properties - Strategically l
Slide 27: Appendix
Appendix DPL Sapporo Higashi Kariki
Slide 28: Asia-focused with Strong Sponsor Support
Asia-focused with Strong Sponsor Support ASIA-FOCUSED LOGISTICS REIT WITH STRONG AND COMMITTED DEVELOPER HIGH QUALITY MODERN PROPERTIES SPONSOR TO SUPPORT FUTURE GROWTH Daiwa House Logistics Trust (DHLT) is established with the investment strategy of principally investing, directly or indirectly, in
Slide 29: Summary of Existing Portfolio
Summary of Existing Portfolio Completion NLA WALE Valuation Year (sq m) Land Tenure Tenancy Type (By NLA)(1) Occupancy(2) (JPY million)(3) Hokkaido & Tohoku DPL Sapporo Higashi Kariki 2018 60,347 Freehold Multi-tenanted 3.8 100.0% 12,400 DPL Sendai Port 2017 63,119 Freehold Multi-tenanted 1.5 100.0%
Slide 30: Portfolio across Japan mitigating concentration risk
Portfolio across Japan mitigating concentration risk Hokkaido & Tohoku % of portfolio Greater Tokyo % of portfolio DPL Sapporo Higashi Kariki 15.3% D Project Maebashi S 4.2% DPL Sendai Port 15.9% D Project Kuki S 1.6% DPL Koriyama 8.3% D Project Misato S 2.9% 39.5% D Project Iruma S 2.9% DPL Kawasak
Slide 31: Well Diversified Portfolio
Well Diversified Portfolio < 20 Years 4.3% BTS 20 - 40 Years 24.8% Freehold 10.9% 48.3% Breakdown by Breakdown by Type of Assets Land Tenor By Total NLA By Total NLA as at 30 June as at 30 June 2022(1) 2022(1) Multi- > 40 Years tenanted 36.5% 75% c. 85% are freehold or >40 years • BTS provide stable
Slide 32: Strong and committed developer Sponsor
Strong and committed developer Sponsor • The Sponsor, Daiwa House Industry Co., Ltd., was founded in 1955 and is one of the largest construction and real estate development companies in Japan • The Sponsor has an extensive track record of asset development across a variety of real estate subsectors,
Slide 33: www.daiwahouse-logisticstrust.com
www.daiwahouse-logisticstrust.com
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