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The deal, done through MapletreeLog's trustee HSBC Institutional Trust Services (Singapore), is structured as a sale and leaseback transaction. The seven-storey warehouse building will be leased back to the vendor for five years, with an option to extend for another term of up to five years.

The Paya Lebar property is currently undergoing some upgrading works which are expected to be completed in the third quarter of this year. It has a gross floor area of about 23,367 square metres which sits on leasehold land covering an area of about 8,968 square metres. Lease tenure for the land is expected to expire in 2053.

MLTM said yesterday that the deal will be accretive to MapletreeLog's distribution per unit (DPU) and the pro forma financial effect of the acquisition on the DPU for the financial year ended Dec 31, 2005 would be an additional 0.14 Singapore cents per unit.

MLTM chief executive officer Chua Tiow Chye said in yesterday's statement: 'Beyond the initial accretion, the rental escalation built into the lease agreement for this property adds moderate increase to the steady base of rental cashflows - a feature typical of our Singapore assets.' The acquisition is expected to be completed in the third quarter of this year and is likely to be funded entirely by debt.