Mapletree Logistics Trust Analysis @ 19 October 2020

Updated: 21 Oct 2020

I just found that I did a mistake in the distribution from asset disposal. The % of DPU from distribution from asset disposal for the past 4 quarters is 6.1% instead of 2.8% as indicated as the post below. I have updated this info on the SREITs Dashboard.

Basic Profile & Key Statistics

Mapletree Logistics Trust (MLT) is a logistics focus SREITs that invests in 146 properties across Singapore, Hong Kong, Japan, China, Australia, Malaysia, South Korea and Vietnam.

Quarter Performance Review

Gross Revenue and NPI increased by more than 8% due to higher contribution from existing properties and contributions from acquisitions as well as redevelopment completion. DPU increased by 1.5% YoY.  

MLT completed its acquisition in Melbourne in September 2020, which should improve upcoming gross revenue, albeit not much.

Lease Profile

Occupancy improved slightly to 97.5%. 53.2% of MLT income is received in SGD and major currencies. WALE is moderate at 4.2 years where the highest lease expiry of 24.8% falls in FY21/22. Weighted average land lease expiry is slightly short at 51.16 years. 

Debt Profile

Gearing ratio is slightly high at 39.5%. Cost of debt is low at 2.2% even with 90.4% of high unsecured debt %. Interest cover ratio improved slightly to 4.9 times. WADE is long at 3.8 years where the highest debt maturity of 22% falls in FY23/24. 

Diversification Profile

MLT is very diversified in terms of geographical, property and tenant where top geographical, top property, top tenant and top 10 tenants contribute 34.9%, 10.4%, 8.7% and 27.3% respectively. Top 3 geographical contributions are from Singapore, Hong Kong and Japan.

Key Financial Metrics

Property yield and distribution on capital are moderate at 5.5% and 3.4% respectively. Management fee is not competitive in which unitholders receive S$ 5.38 for every dollar paid. Distribution margin is high at 58.8%. 2.8% of past 4 quarters DPU is from distribution from asset disposal.

Trends

DPU, NAV per unit and distribution margin are on an uptrend. Property yield is on a slight downtrend and interest cover ratio is on a downtrend.

Relative Valuation

i) Average Dividend Yield  - Average yield at 6.12%, apply the past 4 quarters DPU of 8.192 cents will get S$ 1.34. 

ii) Average Price/NAV - Average value at 1.2, apply the latest NAV of S$ 1.201 will get S$ 1.44.

Author's Opinion

Favorable	Less Favorable
High Occupancy	Low Income in SGD/Major Currencies
Low Cost of Debt	High Management Fees
High Unsecured Debt %	Interest Cover Ratio Downtrend
High Interest Cover Ratio
Long WADE
Well Spread Debt Expiry
Low Top Geographical Contribution
Low Top Property Contribution
Low Top Tenant & Top 10 Tenants Contribution
High Distribution Margin
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

From the above, MLT is indeed having a strong fundamental. Its performance remains strong and unaffected by COVID-19. Together with the result announcement, MLT also announces for the proposed acquisition of 9 Properties in China, Malaysia and Vietnam, and the remaining 50.0% Interest in 15 Properties in China. 

The method of financing would be a combination of debt, private placement and/or preferential offer. The illustrative issue price is at S$ 1.96 per unit.

Both Pro Forma DPU and NAV per unit are increased. Gearing would also be reduced to 37.1%. 

More detail on this acquisition will be provided by MLT in due time. EGM would be held to get unitholders' approval for this acquisition. 

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF

REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.