Mapletree Logistics Trust (MLT) announced last week that it has completed the acquisition of Hyundai Logistics Centre in Gyeonggi-do, South Korea for KRW22.5b (~S$24.7m). The date of completion was ahead of our projection as MLT had previously guided that the transaction was targeted to complete by 3QFY13 (Dec quarter). Hence, the property will contribute two quarters to MLT’s FY13 income, as opposed to just a quarter in our estimate. For FY13, we remain confident of MLT’s financial performance. While management expects business sentiments to stay cautious in light of the slowing growth in Asia and concerns over the Eurozone crisis, we expect MLT to continue to benefit from its recent acquisitions and enhanced operational metrics. We are now making minor adjustments to our FY13 forecasts to incorporate an earlier rental contribution from Hyundai Logistics Centre. However, there is no change to our fair value of S$1.19. Maintain BUY on MLT.
Completion of acquisition of warehouse
Mapletree Logistics Trust (MLT) announced last week that it has completed the acquisition of Hyundai Logistics Centre in Gyeonggi-do, South Korea for KRW22.5b (~S$24.7m). The date of completion was ahead of our projection as MLT had previously guided that the transaction was targeted to complete by 3QFY13 (Dec quarter). Hence, the property will contribute two quarters to MLT’s FY13 income, as opposed to just a quarter in our estimate. As a recap, the property comprises two blocks of three-storey dry warehouses and has a total GFA of 32,300 sqm. The investment is expected to be DPU-accretive, with initial NPI yield of 9.0%. After factoring in the acquisition and divestment of 30 Woodlands Loop in Singapore, we note that the revenue contribution from South Korea is expected to rise from 7.0% to 7.7%.
Steady performance in FY13
For FY13, we remain confident of MLT’s financial performance. While management expects business sentiments to stay cautious in light of the slowing growth in Asia and concerns over the Eurozone crisis, we expect MLT to continue to benefit from its recent acquisitions and enhanced operational metrics. We also believe that positive rental reversions from its portfolio are still on the cards, albeit possibly lower than the average growth rate of 10% seen in 1QFY13. In addition, only 12.7% of its leases by NLA are due for renewal in FY13, of which ~42% has been successfully renewed/ replaced. Hence, we are positive of MLT’s results in the coming quarters.
Retain BUY rating
We are making minor adjustments to our FY13 forecasts to incorporate an earlier rental contribution from Hyundai Logistics Centre. Our FY13F revenue and DPU now stand at S$317.1m and 7.06 S cents, translating to a respectable growth of 14.3% and 5.5% respectively. There is no change to our fair value of S$1.19. Maintain BUY.
Mapletree Logistics Trust (MLT) announced last week that it has completed the acquisition of Hyundai Logistics Centre in Gyeonggi-do, South Korea for KRW22.5b (~S$24.7m). The date of completion was ahead of our projection as MLT had previously guided that the transaction was targeted to complete by 3QFY13 (Dec quarter). Hence, the property will contribute two quarters to MLT’s FY13 income, as opposed to just a quarter in our estimate. As a recap, the property comprises two blocks of three-storey dry warehouses and has a total GFA of 32,300 sqm. The investment is expected to be DPU-accretive, with initial NPI yield of 9.0%. After factoring in the acquisition and divestment of 30 Woodlands Loop in Singapore, we note that the revenue contribution from South Korea is expected to rise from 7.0% to 7.7%.
Steady performance in FY13
For FY13, we remain confident of MLT’s financial performance. While management expects business sentiments to stay cautious in light of the slowing growth in Asia and concerns over the Eurozone crisis, we expect MLT to continue to benefit from its recent acquisitions and enhanced operational metrics. We also believe that positive rental reversions from its portfolio are still on the cards, albeit possibly lower than the average growth rate of 10% seen in 1QFY13. In addition, only 12.7% of its leases by NLA are due for renewal in FY13, of which ~42% has been successfully renewed/ replaced. Hence, we are positive of MLT’s results in the coming quarters.
Retain BUY rating
We are making minor adjustments to our FY13 forecasts to incorporate an earlier rental contribution from Hyundai Logistics Centre. Our FY13F revenue and DPU now stand at S$317.1m and 7.06 S cents, translating to a respectable growth of 14.3% and 5.5% respectively. There is no change to our fair value of S$1.19. Maintain BUY.
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