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US bond rate to stay high for a while. China economy is downward spiral. Better sell.
Mapletree Logistics Trust Q1 FY2025 DPU falls on higher borrowing costs
Distributions fall 7.4 per cent to S$103.7 million, from from S$112 million in Q1 FY2024
MAPLETREE Logistics Trust&rsquo s (MLT) distribution per unit (DPU) fell 8.9 per cent to S$0.02068 for its first quarter ended Jun 30, from S$0.02271 in Q1 FY2024.
MLT&rsquo s manager on Wednesday (Jul 24) reported a fall in revenue to S$181.7 million in Q1 FY2025, from S$182.2 million in the year-ago period. This was mainly due to weaker performance in China, the absence of revenue from divested properties, and currency depreciation of the yen and renminbi.
Net property income declined 0.9 per cent to S$156.7 million in Q1 FY2025, from S$158.1 million in Q1 FY2024. The fall was mitigated by higher contributions from the trust&rsquo s Singapore and Hong Kong properties, and acquisitions completed within the quarter.
&ldquo We continue to face headwinds from persistently high borrowing costs, regional currency depreciation and weakness in China,&rdquo said Jean Kam, chief executive officer of the trust&rsquo s manager.
High borrowing costs have dented distributions to unitholders, with expenses rising 9.4 per cent to S$38.5 million in Q1 FY2025, from S$35.1 million in Q1 FY2024.
Lower divestment gains of S$5.7 million in the current period, compared with S$8.4 million in Q1 FY2024, also dragged on distributions, which fell 7.4 per cent to S$103.7 million in Q1 FY2025 from S$112 million in Q1 FY2024.
MLT acquired three grade-A assets in Malaysia and Vietnam from its sponsor, Mapletree, during the quarter. The trust also divested two properties in Singapore and China with a combined value of about S$26.9 million.
The book value of MLT&rsquo s portfolio of 188 assets was S$13.4 billion as at Jun 30. The weighted average lease expiry stood at 2.9 years as at the end of the quarter, with occupancy at 95.7 per cent, a slight drop from 96 per cent in Q4 FY2024. MLT&rsquo s leverage ratio was 39.6 per cent in Q1 FY2025.
China remains a challenging market for the trust, with negative rental reversions expected to persist amid an uncertain global economic outlook. Higher borrowing costs and currency depreciation against the Singapore dollar will continue to weigh on MLT&rsquo s financial performance in the year ahead.
To mitigate the impact on distributions, about 78 per cent of MLT&rsquo s income stream for the next 12 months has been hedged on the Singapore dollar, and about 83 per cent of its total debt is on fixed rates.
&ldquo We will continue to adopt prudent risk management strategies to navigate through these challenging times, while driving our portfolio rejuvenation strategy to strengthen MLT&rsquo s resilience,&rdquo said Kam.
Very much a US economy (esp interest rate) proxy. If you think goldilocks or hard landing then buy. If you think no landing then sell.
Mapletree Logistics Trust announces DPU decline of 8.9% in 1QFY2025
The Edge Singapore
Wed, Jul 24, 2024 ? 08:35 PM GMT+08 ? 2 min read
https://www.theedgesingapore.com/capital/results/mapletree-logistics-trust-announces-dpu-decline-89-1qfy2025
The Edge Singapore
Wed, Jul 24, 2024 ? 08:35 PM GMT+08 ? 2 min read
https://www.theedgesingapore.com/capital/results/mapletree-logistics-trust-announces-dpu-decline-89-1qfy2025
Lousy set of results notwithstanding unfavourable overall economy / high interest rate environment. Gearing creep up with higher debt. Good thing didn' t add while it was low $1.3x and high $1.2x cos I believe now it will hit below $1.25 in due course. I guess management can' t do much with the persistent high interest rate which eat into their NPI. Every thing earn all go into repaying interest. They are trying hard to save cash by doing Dividend Reinvestment Plan. They better have other ideas standing by in case the expected cut in interest rate does not happen soon.
https://links.sgx.com/1.0.0/corporate-announcements/SP1V36WR76A63O00/812733_20240724-MLT_PR_1QFY2425_final.pdf
Another round of DPU beckoning. Results after market closed today. It is expected that DRIP will be offered again and since the current prices are fluctuating on the low side, personally I will opt for at least 50% DRIP. Let' s see what' s the DPU first. Corresponding DPU was 0.02037 but that quarter was 11 days less as advanced payment was made in preceding quarter owing to private placement in March 2023. For the record, the PP was priced at $1.649 with 3.9x oversubscribed. The reit traded as high as $1.8 post PP on 5.4.23 and since then, price drop all the way. All BBs who gotten the PP managed to get out before price slide? A good question but no way to find out lol.
MIT pretty strong today
👍
Alignment ( Date: 17-Jul-2024 03:04) Posted:
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Talk about a misleading headline. The article itself refers to potentially negatve rental reversions for 16% of its properties, and positive rents for the rest. So the article should actually say MLT manager guides for continuing overall positive rental reversions. Sorted for the Edge.
PiRPiR ( Date: 16-Jul-2024 21:24) Posted:
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https://www.theedgesingapore.com/capital/reits/mapletree-logistics-trusts-manager-guides-negative-rental-reversions-over-next-few
Mapletree Logistics Trust?s manager guides for negative rental reversions ?over the next few quarters?
Fri, Jul 12, 2024 ? 01:55 PM GMT+08 ? 5 min read
Mapletree Logistics Trust?s manager guides for negative rental reversions ?over the next few quarters?
Fri, Jul 12, 2024 ? 01:55 PM GMT+08 ? 5 min read
Over time you will almost certainly get that given the high yield. But the question is how long you will have to wait before getting there.
Targeting a 20% return
Yes. Should be here.
Delvyss ( Date: 16-Jul-2024 08:09) Posted:
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It' s just the beginning of a reversal.
Lots more upside.
Could be nearing $1.50 by end of this week.
Lots more upside.
Could be nearing $1.50 by end of this week.
It should be an upward trend.
ongkk96 ( Date: 12-Jul-2024 17:53) Posted:
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What happen on next Monday?
Good news:
CHICAGO, July 11 (Reuters) - The " last mile" of the Federal Reserve' s battle against inflation may have shortened to a last lap after U.S. consumer prices unexpectedly fell in June, shoring up policymakers' confidence that they are winning the fight and paving the way to interest-rate cuts in coming months.
CHICAGO, July 11 (Reuters) - The " last mile" of the Federal Reserve' s battle against inflation may have shortened to a last lap after U.S. consumer prices unexpectedly fell in June, shoring up policymakers' confidence that they are winning the fight and paving the way to interest-rate cuts in coming months.
Joelton ( Date: 12-Jul-2024 09:40) Posted:
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Mapletree Logistics Trust manager expects lower rates to persist among renewed leases in China in coming quarters
Ahead of the trust&rsquo s annual general meeting next week, the questions sent in by unitholders were mostly on the Chinese market
MAPLETREE Logistics Trust (MLT) expects negative rental reversions in China to persist over the next few quarters, with expiring rental rates being marked to market, said its manager on Thursday (Jul 11).
The manager noted that China is facing &ldquo a challenging leasing environment&rdquo amid a weaker-than-expected post-pandemic economic recovery and a healthy supply of warehouse space.
Against this backdrop, tenants in China are cautious, and preferring not to renew leases ahead of their expiry, or are committing to shorter leases because of the uncertainty in the market outlook, it added.
The manager of the logistics real estate investment trust (Reit) made these remarks when responding to queries from its unitholders ahead of its annual general meeting on Jul 17. It posted a list of these questions with its responses in a bourse filing in the evening.
A unitholder asked about the likelihood of tenants in China renewing their leases amid the challenges faced by the economic powerhouse&rsquo s logistics sector, and whether further drops in rental reversion were expected.
The inquirer, referring to the annual report, noted that 29.6 per cent of the trust&rsquo s leases are due for renewal in the coming financial year of these leases, 13.2 per cent are in China.
In response, MLT&rsquo s manager cited the challenges in the leasing environment, the weaker post-pandemic turnaround and the oversupply of properties putting pressure on rentals, and making tenants cautious.
It added that the trust prioritised maintaining stable occupancy rates over rental growth, and maintained that the team had made &ldquo good progress&rdquo in renewing or replacing expiring leases.
Another unitholder asked whether the trust would be affected by the falling occupancy rates in China, to which the manager replied that it has historically kept its occupancy rate at more than 90 per cent. (The nation&rsquo s average rate is 78.2 per cent.)
When asked about factors that would spur the recovery of logistics assets in China, MLT&rsquo s manager noted that the supply of logistics space is anticipated to fall this year compared to last year, which could trigger a recovery.
Unitholders also expressed concern about the impact of macroeconomic drivers such as supply-chain reconstitutions.
In reply, MLT&rsquo s manager said that the trust is poised to reap the benefits of supply network diversification, because South-east Asia is now an attractive destination for businesses on the hunt for alternative manufacturing bases.
The trust listed Vietnam, Malaysia and India as &ldquo prime beneficiaries&rdquo of this trend.
&ldquo Our exposure to emerging markets positions us to harness their higher growth potential and benefit from structural trends,&rdquo it said. &ldquo This is balanced by our approximately 70 per cent exposure to developed markets, which provide stability to overall portfolio performance.&rdquo
Clearer now that US economy at an aggregate level increasingly in trouble (let' s not talk about the issues with inequality), so interest rate cut expectations for this year rocketing.