Mapletree Logistics Trust Review @ 31 January 2021

Basic Profile & Key Statistics

Mapletree Logistics Trust (MLT) is a logistics focus SREITs that invests in 156 properties across Singapore, Hong Kong, Japan, China, Australia, Malaysia, South Korea and Vietnam.

Performance Review

Gross revenue, NPI and distributable income to unitholders increased YoY by 15.5%, 14.9% and 10.2% respectively due to higher revenue from existing properties, income contribution from acquisitions as well as redevelopment completion. Despite that, DPU increased by 1% YoY due to enlarged unitholders base.

Rental reversion is at positive 1.6%.

MLT had completed the above acquisitions in December 2020 which is expected to increase its income moving forward.

Lease Profile

• Occupancy is slightly high at 97.1%.
• Income in SGD/Major Currencies is low at 52.3%.
• WALE is slightly short at 3.7 years where the highest lease expiry of 26.5% falls in FY21/22.
• Weighted average land lease expiry is slightly short at 50.91 years.

Debt Profile

• Gearing ratio is moderate at 36.8%.
• Cost of debt is low at 2.2%.
• Fixed rate debt % is moderate at 79%.
• Unsecured debt % is high at 91.2%.
• WADE is long at 3.8 years where the highest debt maturity of 23% falls in FY23/24.
• Interest coverage ratio is high at 5 times.

Diversification Profile

• Top geographical contribution is low at 33.7%
• Top property contribution is low at 10.4%.
• Top tenant contribution is low at 8.3%.
• Top 10 tenants contribution is low at 26.9%.
• Top 3 countries contribution is from Singapore, Hong Kong and Japan which contribute close to 2/3 of GRI. 

Key Financial Metrics

• Property yield is moderate at 5.3%
• Management fees over distribution is not competitive at 18.9% in which unitholders receive S$ 5.29 for every dollar paid.
• Distribution on capital is high at 3.6%
• Distribution margin is high at 56.3%.
• 5.9% of the past 12 months DPU is from distribution from asset disposal.

Trends

• Uptrend - DPU, NAV per Unit, Distribution Margin
• Flat - Distribution on Capital
• Downtrend - Interest Coverage Ratio, Property Yield

Lower property yield at this quarter is due to the major acquisition is only completed on 1 December 2020.

Relative Valuation

• Dividend Yield - Past 4 quarters DPU @ 8.213cents / average yield @ 5.92% = S$ 1.39
• Price/NAV - NAV @ S$ 1.284 x average P/NAV @ 1.22 = S$ 1.57

Author's Opinion

Favorable	Less Favorable
Low Cost of Debt	Low Income in SGD/Major Currencies
High Unsecured Debt	Non Competitive Management Fees
Long WADE	Interest Coverage Ratio Downtrend
Well Spread Debt Maturity
High Interest Coverage Ratio
Low Top Geographical Contribution
Low Top Property Contribution
Low Top Tenant & Top 10 Tenants Contributions
High Distribution on Capital
High Distribution Margin
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

MLT fundamental remains good as always and we should be able to see the full benefit of the major acquisition (9 Properties in China, Malaysia and Vietnam, and remaining 50.0% interest in 15 Properties in China) in upcoming quarters.

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

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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 a 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.