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CGS CIMB: Mapletree Logistics Trust
Current Price: SS$1.63 (as of 25 Jan 2024)
Target Price: S$1.88
Recommendation: ADD
Up/downside: +15%
Mapletree Logistics Trust (MLT) reported a modest year-on-year increase in its 3Q revenue to S$184 million and Net Property Income (NPI) to S$159.5 million, attributed to higher contributions from Singapore assets and recent acquisitions.
Despite this, the 3QFY24 DPU of 2.253 Singapore cents was in line with 26.2% of the full-year forecast. The occupancy rate slightly declined to 95.9% due to lower occupancies in Singapore, Hong Kong SAR, and Malaysia. Rental reversion in China remained negative, particularly in Tier 2 cities, due to oversupply and challenging conditions, contrasting with positive rental reversions in other regions.
MLT's financial health remains stable with a gearing ratio of 38.8% and a substantial portion of its debt and distributable income hedged against interest rate fluctuations and currency risks. The trust is actively pursuing its asset recycling strategy, focusing on acquisitions in Malaysia, Vietnam, and India, and divestments to fund these investments. Recent transactions include acquiring a warehouse in India and divesting two assets in Malaysia, alongside undertaking redevelopment projects in Singapore and Malaysia to enhance its portfolio.
https://www.investor-one.com/editorial/24535-Analyst-Alert-Recommendation-on-Frasers-Centrepoint-Mapletree-Logistics-REIT-and-More
Current Price: SS$1.63 (as of 25 Jan 2024)
Target Price: S$1.88
Recommendation: ADD
Up/downside: +15%
Mapletree Logistics Trust (MLT) reported a modest year-on-year increase in its 3Q revenue to S$184 million and Net Property Income (NPI) to S$159.5 million, attributed to higher contributions from Singapore assets and recent acquisitions.
Despite this, the 3QFY24 DPU of 2.253 Singapore cents was in line with 26.2% of the full-year forecast. The occupancy rate slightly declined to 95.9% due to lower occupancies in Singapore, Hong Kong SAR, and Malaysia. Rental reversion in China remained negative, particularly in Tier 2 cities, due to oversupply and challenging conditions, contrasting with positive rental reversions in other regions.
MLT's financial health remains stable with a gearing ratio of 38.8% and a substantial portion of its debt and distributable income hedged against interest rate fluctuations and currency risks. The trust is actively pursuing its asset recycling strategy, focusing on acquisitions in Malaysia, Vietnam, and India, and divestments to fund these investments. Recent transactions include acquiring a warehouse in India and divesting two assets in Malaysia, alongside undertaking redevelopment projects in Singapore and Malaysia to enhance its portfolio.
https://www.investor-one.com/editorial/24535-Analyst-Alert-Recommendation-on-Frasers-Centrepoint-Mapletree-Logistics-REIT-and-More
dpu up, share px down?
really lousy exchange
really lousy exchange
If script price is attractive i.e, below $1.5, I will opt for 100% script.
Mapletree Logistics Trust&rsquo s DPU up 1.2% in Q3 to S$0.02253
DISTRIBUTION per unit (DPU) for rose 1.2 per cent to S$0.02253 for its third quarter ended Dec 31, 2023, underpinned by a resilient portfolio, contributions from acquisitions and divestment gains.
The latest DPU is up from the S$0.02227 from the same period a year ago, said the trust manager on Wednesday (Jan 24).
Gross revenue for the quarter went up 2.1 per cent to S$184 million, mainly due to higher contribution from existing properties in Singapore and contribution from acquisitions in Japan, South Korea and Australia, which were completed in the first quarter of FY 2023/24.
Net property income (NPI) rose 1.5 per cent year on year (yoy) to S$159.5 million, and the amount distributable to unitholders grew 4.8 per cent yoy to S$S$112.2 million.
At end-December, MLT had a gearing ratio of 38.8 per cent, with an average debt duration of 3.7 years. The weighted average borrowing cost for Q3 stayed at 2.5 per cent per annum, said the trust manager.
&ldquo MLT has more than sufficient liquidity to meet its maturing debt obligations in this financial year, as well as in FY24/25,&rdquo added the manager.
For the nine-month period, MLT&rsquo s gross revenue grew 0.2 per cent to S$552.9 million, and NPI declined by 0.2 per cent to S$479.6 million.
Meanwhile, property expenses rose 2.8 per cent to S$73.3 million, mainly due to its enlarged portfolio, and an increase in property tax and maintenance expenses, said the manager.
The trust&rsquo s DPU for the nine months ended December rose 0.7 per cent to S$0.06792, including a divestment gain of S$29.6 million.
The amount distributable to unitholders rose correspondingly by 4 per cent to S$336.7 million during the period.
Despite the positive results, the manager&rsquo s chief executive officer Ng Kiat said that weaker regional currencies, high borrowing costs and a challenging leasing environment in China continue to pose headwinds to the trust&rsquo s financial performance.
&ldquo We remain laser-focused on rejuvenating our portfolio towards modern, high-specs assets and continue to implement proactive high-risk management strategies to navigate the uncertain economic landscape,&rdquo she added.
As at end-December last year, MLT&rsquo s portfolio consisted of 187 properties with a total value of S$13.3 billion.
Portfolio occupancy stood at 95.9 per cent as at end-December, and the weighted average lease expiry by net lettable area of the portfolio is about 2.9 years.
The portfolio had a positive average rental reversion of 3.8 per cent.
Some 83 per cent of MLT&rsquo s total debt has been hedged into fixed rates. Approximately 80 per cent of its income stream for the next 12 months had been hedged into the Singapore dollar.
In its outlook, the trust manager said that it would continue to focus on portfolio rejuvenation, with more than S$900 million in acquisitions of assets announced or completed in the year to date it would also continue its divestment of properties with older specifications and limited potential to unlock value through redevelopment.
our sin lollar too strong thus losing out on foreign ex change rate n int rate still at high...
Speechless...........
黑 猫 白 猫 ， 能 在 逆 境 中 还 能 捉 到 老 鼠 的 就 是 好 猫 。
They have done it but I would not be overly joyed as DPI thugh increased YoY, it did not go up QoQ. Also, China and strong SGD is 2 achillies heel snapping at MLT' s performance. The DPI also consists of divestment gain but not too concern in this area as they have done well in the area of assets recycling and rejuvention. Already, 2 more properties in Malaysia are slated to be sold above valuation soon and judging by their track record, more acquistiion is surely on the card. It is likely that DRIP will be priced around $1.55 to $1.60 and in either case, I should be opting for half half again. It is not always one has the chance to acquire new shares without paying brokerage and other related fees. Now let' s see how will the sister reits MPACT faring. Not too optimistic but in good position to pick up more units if price prove attractive post results.
HVRRVH ( Date: 20-Dec-2023 14:41) Posted:
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Script units received. Price held steady with enlarged shares base, DPU will decrease if everything else stay the same so the reit must increase NPI and net distributable income. The management has the track record to show that it can do this.
Fed pivoted, DJI closed at ATH & S& P also breached 4700 level. If all go as planned, 2024 will see 3 rate cuts, hooray to all reits investors! For the near future, strong reits such as those in Mapletree & Capital stables should have seen the bottoms and now should be on their way up. Some reits are unfairly ' punished' such as MLT, for in calander year 2023, its DPU in fact went up by 0.72% compared to CY 2022. Its sister reit MPACT on the other hand, didn' t fare as well and its CY2023' s DPU was 9.82% lower than that of CY2022. It should still do fine if there is no more cut in future DPU. It was a shame that they have to take on the portfolio of the previous North Asia reit.
HVRRVH ( Date: 08-Dec-2023 10:22) Posted:
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Time flies. Another DRIP priced at $1.437 for the latest round. This time I have opted for 50/50 in script and cash. On hindsight should have opted for all scripts but with Reits Index hitting nearing covid low of 96.3 in end Oct 23, the confident of a recovery is low at the material time of election of script or cash. Since end Oct 23, Singapore Reit Index has been on uptrend with current level at 1.068. The rate hike cycle is coming to an end soon, as evidenced by US equitity markets hovering and consolidation at higher level, poising before a breakout. In fact, MLT did not experice a price drop in the latest round of XD with current buying still appear strong. Same can be said of many other quality reits. As a long term reits investors, it may not be a time to say bad time has come to an end but I am glad I did manage to add some reits holding when prices were on the way down.
HVRRVH ( Date: 13-Aug-2023 13:10) Posted:
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Mapletree Logistics Trust divests 3 properties in Singapore, Malaysia
MAPLETREE Logistics Trust (MLT) : M44U -1.28% will divest three properties as part of its efforts to rejuvenate its portfolio through selective divestures.
&ldquo Capital released from the divestments will provide MLT with greater financial flexibility to pursue investment opportunities in high specification, modern logistics facilities with higher growth potential,&rdquo its manager announced on Friday (Nov 11).
MLT&rsquo s trustee has agreed to sell 10 Tuas Avenue 13 to an unrelated third party for S$11.11 million, 15.7 per cent higher than its latest valuation of S$9.6 million as at Oct 1, 2023.
The property, which was completed in 2008, is a six-storey cargo lift warehouse with a gross floor area of 13,471 square metres (sq m) on a land site of 12,082 sq m.
The proposed divestment is expected to be completed by the third quarter of FY24 and is not expected to have a material impact on MLT&rsquo s net asset value and net property income for FY24.
In a separate bourse filing, MLT&rsquo s manager said that the trustee has entered into conditional sale and purchase agreements with unrelated third party buyers through its special purpose vehicle in Malaysia.
The agreements involve the proposed divestments of Flexhub and Padi in Malaysia for a total sale price of RM151.2 million (S$43.8 million).
Flexhub, located in Senai, Johor, has a total net lettable area of 63,175 sq m and is being sold for RM125.1 million, 7.4 per cent above its latest valuation as at Oct 1, 2023.
Padi, which is in Pasir Gudang, Johor, has a net lettable area of 23,717 sq m and is being sold for RM26.1 million, 16 per cent above its latest valuation as at Oct 1, 2023.
Both divestments are expected to be completed in the first half of FY25, subject to the satisfaction of certain conditions. The transactions are not expected to have a material impact on MLT&rsquo s net asset value and net property income for FY25.
After the divestments, MLT&rsquo s portfolio will consist of 185 properties.
Mapletree S-Reits&rsquo scorecards reflect operational resilience despite global slowdown
MAPLETREE Logistics Trust : M44U 0% (MLT) reported 1.5 per cent higher year-on-year gross revenue in the second quarter of FY23/24, on the back of higher contributions from existing assets mainly in Singapore and Hong Kong, and recent acquisitions in Japan, Australia and South Korea, offset by weaker performance in China.
With forex hedging and including a divestment gain of S$8.8 million, the amount distributable to unitholders increased 4.2 per cent year on year, and distribution per unit (DPU) grew 0.9 per cent to 2.268 cents on an enlarged unit base.
During the quarter, MLT completed divestments of four assets in Malaysia, Singapore and Japan, which were executed at an average premium to valuation of 13 per cent.
MLT&rsquo s portfolio occupancy was maintained at 96.9 per cent and 89 per cent of leases that were due for expiry in the quarter were renewed, with weighted average lease expiry at three years.
Positive rental reversions were recorded ranging from 3.2 per cent in Malaysia to 16.5 per cent in Hong Kong, except for China which registered negative rental reversion of -8.6 per cent due to weakness in Tier 2 cities.
Amid the slowdown, MLT expects rental rates for most markets to remain stable, with the exception of China which is likely to remain negative in the near term.
Approximately three-quarters of MLT&rsquo s portfolio by revenue serves consumer-related sectors with its top three tenant trade sectors being food & beverage (20 per cent), consumer staples (19 per cent), and electronics & IT (13 per cent).
Mapletree Pan Asia Commercial Trust : N2IU +0.77% (MPACT) recorded 10.1 per cent and 8.7 per cent year-on-year growth in gross revenue and net property income respectively in the second quarter of FY23/24, driven by stronger performance of the Singapore assets and full period contributions from the overseas assets.
However, given the stronger Singapore dollar and higher interest rates, MPACT&rsquo s DPU declined 8.2 per cent to 2.24 Singapore cents.
In terms of operational performance, MPACT during its first half FY23/24 successfully renewed over 1.3 million square feet of lettable area, yielding a 3.2 per cent portfolio rental uplift. VivoCity and Mapletree Business City, two of its core assets, recorded rental uplifts of 14.2 per cent and 7.1 per cent respectively.
MPACT&rsquo s portfolio committed occupancy climbed from 95.7 per cent to 96.3 per cent quarter on quarter. Increased commitments were also recorded in the majority of markets, with VivoCity and Festival Walk close to full commitment.
VivoCity continues to record stronger shopper traffic and tenant sales, increasing 17.4 per cent and 4 per cent year on year respectively.
Mapletree Industrial Trust : ME8U 0% (MIT) announced that the distribution to unitholders for the second quarter of FY23/24 rose 3.5 per cent year on year, partly due to higher distribution declared by its joint venture and other gains. MIT&rsquo s DPU declined 1.2 per cent to 3.32 cents as a result of an enlarged unit base.
During the quarter, MIT registered positive rental revisions across all property segments with higher average rental rates for its Singapore portfolio and North American portfolio at S$2.19 per square foot per month (psf/mth) and US$2.42 psf/mth respectively.
MIT also completed the acquisition of a data centre in Osaka, Japan, which has increased the weighted average lease to expiry for its overall portfolio from 3.9 years to 4.2 years.
MIT&rsquo s manager notes that as global growth was projected to slow down, the Reit will adopt cost-mitigating measures while focusing on tenant retention to maintain a stable portfolio occupancy and prudent capital management to manage costs.
Currently, MIT&rsquo s top 10 tenants form about 30.5 per cent of the portfolio&rsquo s gross rental income, and no single trade sector accounts for over 17 per cent of its portfolio&rsquo s gross rental income.
REITs are Challenged! But Mapletree Logistics Trust' s Resilience Surprised Investors! This changed my mind about logistics REITs. #dividendstocks
https://youtu.be/S_4OzoTbQNc
https://youtu.be/S_4OzoTbQNc
Analysts positive on Mapletree Logistics Trust, mixed on target price
MAYBANK has cut its target price on Mapletree Logistics Trust : M44U 0%(MLT) to S$1.60, from S$1.80 previously, to factor in lower contributions from China.
The trust recently reported its results for the second quarter of its financial year, which ends in March 2024.
&ldquo Occupancy and reversions softened mainly due to China,&rdquo Maybank analyst Krishna Guha noted in his report.
He lowered his distribution per unit forecast by 0.5 per cent on China headwinds.
He noted, however, that MLT has demonstrated &ldquo disciplined execution&rdquo , and is keeping his &ldquo buy&rdquo call on the stock.
OCBC Investment Research has also trimmed its target price &ndash to S$1.72, from S$1.85.
This was to account for a higher assumed cost of equity in this &ldquo higher-for-longer interest rate environment&rdquo .
&ldquo Rising borrowing costs and more challenging conditions in China are likely to weigh on its distributable income growth in the near term,&rdquo the analysts said.
DBS analysts Derek Tan and Dale Lai were more positive, maintaining their &ldquo buy&rdquo call and S$1.88 target price.
Their target price assumes a discount rate of 6.8 per cent, an FY2024 yield of 4.7 per cent and a price-to-net asset value (P/NAV) ratio of 1.3 times.
They continue to like MLT for its &ldquo unique regional platform&rdquo as well as its exposure to the fast-growing e-commerce sector, which is driving high retention rates and reversionary growth.
While China has acted as a dampener, MLT&rsquo s diversified platform &ndash with 80 per cent of revenue coming from markets with stable demand-supply dynamics &ndash should remain resilient.
&ldquo We believe that the high earnings visibility, which is a welcome trait given the ongoing economic uncertainties, implies that the Reit&rsquo s premium to NAV is fair,&rdquo they added.
DBS also noted that MLT has been on an acquisition path, and has a pipeline of properties estimated to be valued above S$2 billion.
&ldquo This visibility and availability of a pipeline from its sponsor is a unique trait that its peers do not enjoy.&rdquo
MLT eyes up to S$300 million in acquisitions in Malaysia, Vietnam and India
MAPLETREE Logistics Trust (MLT) expects to make between S$200 million and S$300 million in acquisitions in its current financial year in countries such as Malaysia, Vietnam and India, the real estate investment trust&rsquo s (Reit) manager said on Wednesday (Oct 25).
&ldquo We will be buying some more. Before the year-end, you should hear us buying some more,&rdquo said Ng Kiat, chief executive of the manager, at a briefing delivered to analysts on the Reit&rsquo s first-half results.
Divestments will also be a key part of the Reit&rsquo s strategy, as it seeks to rejuvenate its portfolio MLT expects to let go of S$500 million in assets in the coming years.
&ldquo We have a very strong balance sheet, and an active recycling programme,&rdquo she said, noting that divestments have paved the way for further acquisitions.
According to her, a &ldquo substantial portion&rdquo of buyers in the market &ndash especially speculative ones &ndash have dropped off, and MLT is expecting some expansion in capitalisation rates. &ldquo We want to take this opportunity to get some good-value properties from third parties and our sponsor.&rdquo
The Reit previously announced an acquisition of eight assets across the Asia-Pacific for over S$900 million in March, ahead of the S$200 million to S$300 million announced on Wednesday.
The manager expects strong growth from countries such as India, Vietnam and Malaysia. &ldquo Acquisitions coming out from these three markets will be of great interest to us,&rdquo Ng said.
It is also keeping an eye on other markets. Korea and Australia, for example, have seen cap-rate expansions, though things there may not have reached a bottom yet. &ldquo So maybe we will wait a bit. But if it&rsquo s a good asset in a good location, and we&rsquo re able to get it at a good price, we will do that,&rdquo Ng added.
Ng said of MLT&rsquo s planned divestments of around S$500 million over the next few years (or around S$100 million to S$200 million per year): &ldquo Investors need to understand that we are not a stagnant platform. We are not going to pretend and tell investors that the assets that we have had since 2005 are going to be relevant in 2025.&rdquo
She explained that the logistics industry has undergone a major structural shift, with greater demands for automation and flexibility of expansion, and noted that the Reit aims to have &ldquo the most modern fleet of warehouses&rdquo in as many locations as needed.
Assets with specifications less relevant to current needs &ndash and there are such assets in Hong Kong, Japan, Singapore, Malaysia, Korea and Australia &ndash would either be rebuilt or sold, Ng said. Talks are ongoing, and the assets that will be divested will depend on the buyer and the price, she shared. Further divestments will be announced later this year.
Ng rejected the view that the divestments were being undertaken to lift the Reit&rsquo s distribution per unit (DPU).
MLT reported on Tuesday that the amount distributable to unitholders in Q2 grew 4.2 per cent on year to S$112.5 million, which included S$8.8 million of divestment gain. DPU grew 0.9 per cent to S$0.02268 cents on an enlarged unit base.
&ldquo The reason we are doing (divestments) is not because we are keen to harvest and distribute divestment gains to unitholders,&rdquo Ng pointed out. &ldquo This divestment strategy will be a critical tool to keep our platform young, relevant and competitive for the next 10 years.&rdquo
Mapletree&rsquo s group of REITs are a &lsquo great place to be in&rsquo , says DBS
DBS Group Research analysts Derek Tan, Dale Lai, Rachel Tan and Geraldine Wong like the group of REITs by the Mapletree group, calling them a &ldquo great place to be in&rdquo .
&lsquo &rsquo We featured Mapletree Logistics Trust (MLT) M44U 0.00% , Mapletree Industrial Trust ME8U -0.44% (MINT) and Mapletree Pan Asia Commercial Trust (MPACT) N2IU 0.00% in a themed conference in Bangkok, meeting with existing and new investors,&rdquo say the analysts in their Sept 25 report.
&ldquo Overall, conversations focused on the sustainability of returns (i.e. any bright spots in the operating and demand outlook) given the slowing economic outlook, financial management given an extended period of high-interest rates impacting distributions,&rdquo they add.
Amid the more hawkish posture from the US Federal Reserve, with markets now adjusting to two rate cuts from three in 2024, the analysts are advising investors to &ldquo add&rdquo their positions selectively.
MINT and MLT, which are industrial REITs, are preferred due to the resiliency of their income streams. At the same time, MPACT&rsquo s valuation at 0.85x of its P/B and forward yields of over 6% and in excess of -1 standard deviation, is &ldquo starting to look interesting for investors&rdquo .
&ldquo In addition, we note that recent encouraging signs of China&rsquo s macros bottoming out (industrial production and retail sales in August 2023 picked up steam) could be a key catalyst for investors to add more convincingly if these improvements are sustained,&rdquo say the analysts.
Furthermore, the REITs&rsquo financial metrics &ndash referring to MLT, MINT and MPACT&rsquo s interest coverage ratios at 3.2x to 4.4x &ndash are able to provide ample buffers even if interest rates remain elevated.
&ldquo A well-positioned debt expiry profile and hedge ratios in excess of 75% shield the Singapore REITs or S-REITs although those levels could come off towards the 70% level in the interim as the managers trade off taking &lsquo insurance&rsquo by fixing interest rates at near-peak interest rates levels,&rdquo they add.
Operationally, MLT&rsquo s reversions are generally expected to remain positive for most of its cities given the tight supply of properties. Its occupancy rate is also expected to be resilient in most countries with overall rates to remain between 97% to 98%.
&ldquo Key market to watch is China ([at] 20% of exposure) where [its] outlook remains mixed with close to 45% of China (9% of overall portfolio) are in the Tier 2/3 cities which are seeing weak demand due to uncertain macro coupled with competitive supply,&rdquo say the analysts.
MINT&rsquo s occupancy rates are also likely to remain stable despite the weaker q-o-q numbers in the 1QFY2024 ended June. Competition for space in Singapore is not likely to impact the REIT&rsquo s overall returns given that the REIT&rsquo s flatted factory portfolio remains price competitive in the current landscape with still-positive reversions.
However, the analysts warn that the REIT may see some weakness in the near-term for its US data centres due to the phased return of space from AT& T&rsquo s lease.
&ldquo Of note, is a near-term expiry in Milwaukee (0.9% of revenues) and expected to be empty) while the manager is looking to re-let space in Tennessee (1.8% of revenue in November) to a new tenant in the healthcare industry while the medium-term opportunity for its San Diego (2.6%) in December 2024 could be re-positioned,&rdquo say the analysts.
Finally, MPACT&rsquo s rental reversions are estimated to remain stable with the positive rental uplifts seen, led by Singapore. While the REIT&rsquo s Festival Walk property in Hong Kong is still negative, the mall should continue to see lower negative reversions heading forward.
&ldquo The return of China tourists could lift overall retail sales in Hong Kong, driving an improvement in overall retail sentiment,&rdquo say the analysts.
Overall, the analysts believe that the managers of all three REITs are able to deliver distribution per unit (DPU) growths of 0% to 1% in this new period of &ldquo red hot&rdquo interest rates as most of its property exposures are seeing improving cashflow profiles due to them remaining &ldquo anchored in a landlord&rsquo s market&rdquo .
Mapletree Logistics Trust to divest Moriya Centre in Japan for $95.5 mil
The manager of Mapletree Logistics Trust has proposed to divest Moriya Centre in Japan for 10.03 billion yen ($95.5 million). The proposed divestment was made via the trust&rsquo s trustee, which entered into a sale and purchase agreement (SPA) on Sept 1.
The third party buyer is not an interested party of MLT.
The proposed divestment is said to be in line with the manager&rsquo s efforts to rejuvenate its portfolio through the selective divestments of its non-core assets.
Moriya Centre is located in Moriya, Ibaraki and comprises three blocks of four-storey industrial buildings and ancillary offices. The blocks have an average age of 17 years and a total net lettable area (NLA) of 41,713 sqm.
The sale price is 12.2% above the property&rsquo s latest valuation of 8.94 billion yen as at March 31.
The divestment is expected to be completed by the 3QFY2023/2024.
Now waiting for it to come down to around 1.6 level. Market is still embroil in uncertainty and the high interest rate environment will not end so soon. This is good time to hunt for good reits and good grow companies.
HVRRVH ( Date: 13-Aug-2023 13:10) Posted:
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Trying hard to push above script price of $1.649. I have just throw away the green colour script electing form in case got tempted to elect script if the invisible hands manage to push the price up to $1.7 level.
HVRRVH ( Date: 03-Aug-2023 15:56) Posted:
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