Mapletree Industrial Trust (MINT SP) - DBS Research 2017-06-09: Optimising Portfolio Returns Through Selective Divestments

Mapletree Industrial Trust (MINT SP) - DBS Vickers 2017-06-09: Optimising Portfolio Returns Through Selective Divestments MAPLETREE INDUSTRIAL TRUST ME8U.SI

Mapletree Industrial Trust (MINT SP) - Optimising Portfolio Returns Through Selective Divestments

  • Entered into agreement to sell 65 Tech Park Crescent for S$17.688m to end user.
  • Proceeds could be utilised towards repayment of bank debt, investments or returned to shareholders.
  • Asset recycling strategy aimed at optimising returns should be well received by investors.



What’s New 

  • Mapletree Industrial Trust (MINT) has entered into an agreement to divest 65 Tech Park Crescent for S$17.688m to Concrete Innovators Co. Pte Ltd. The property is a three storey Light Industrial Building (LIB) with total gross floor area of 107,373 square feet. The property has a remaining land lease tenure of 36 years. The sale price represents a slight premium over the latest valuation of S$17.6m but is 34% above MINT’s purchase price of S$13.2m back in 2010.

Potential down-time upon expiry of master-lease in Nov 2017.

  • MINT is expecting to see efficiency loss and down-time upon the expiry of the master lease in Nov 2017 as a result of subdued leasing demand for the property based on the current configuration. As such, the sale of the property is the most optimal strategy for MINT to realise value for shareholders. 
  • The impact on numbers is expected to be minimal given that the property only forms c.0.3% of MINT’s portfolio. The sales proceeds will be utilised to either paring down debt, investments or returned to shareholders.

Asset-recycling in place.

  • While impact on the REIT is small, we believe that the Manager’s pro-active strategies to optimise returns through selective redevelopment and asset divestments will be well received by investors. 
  • Maintain our BUY call, TP S$1.94.




Derek TAN DBS Vickers | Melvin SONG CFA DBS Vickers | Singapore Research Team DBS Vickers | http://www.dbsvickers.com/ 2017-06-09
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 1.940 Same 1.940



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