Friday, 25 July 2014

Mapletree Logistics Trust

Kim Eng on 22 July 2014

  • 1QFY3/15 results in line with our and market expectations.
  • Acquiring another property from sponsor for SGD41.1m with initial NPI yield of 8%. More could be on the cards.
  • FY3/15E-17E DPU forecasts raised by up to 1.6%; reiterate HOLD with a higher TP of SGD1.18.
In-line 1QFY3/15 results
MLT posted a 5.6% YoY rise in 1QFY3/15 DPU, meeting 26% of our full-year estimate, aided by contribution from Mapletree Benoi Logistics Hub and a 12% YoY positive rental reversion for leases
secured during last quarter. MLT has about 18% of leases, in terms of NLA, due for renewal in FY3/15. The all-in-financing cost for 1QFY3/15 averaged 2.0% (4QFY3/14: 1.9%) with an average term of debt of 3.4 years. According to MLT’s interest rate sensitivity analysis, its DPU would decline by ~0.5%, or 0.009 SGD cts per quarter, for every 25bps increase in interest rates.

Mapletree Zhenzhou Logistics Park acquisition
MLT has signed a MoU with its sponsor, Mapletree Investments Pte Ltd, to acquire Mapletree Zhenzhou Logistics Park in Henan, China for SGD41.1m. The acquisition, which will deliver an initial 8.0% NPI yield, will raise its gearing to 34.5% (33.4% at end-June). We expect this to complete by 1 Aug and to be fully debt funded. The SGD107m redevelopment of 5B Toh Guan Road East will add 40,000 sq m of space when completed in 1QFY3/17. We raise our FY3/15E-17E DPU forecasts by 1.2-1.6% to factor in these initiatives and better reversion rates for its overall portfolio.
Reiterate HOLD with a higher DDM-derived TP of SGD1.18 (cost of equity = 7.1%; Tg = 1%) from SGD1.15. Catalyst: Further asset injections by the sponsor, which has another 14 sizeable logistics
developments in Asia, representing more than half of MLT’s total portfolio NLA.

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