Mapletree Logistics Trust - RHB Invest 2016-05-03: 4QFY16 Results Flash Note

Mapletree Logistics Trust - RHB Invest 2016-05-03: 4QFY16 Results Flash Note  MAPLETREE LOGISTICS TRUST M44U.SI 

Mapletree Logistics Trust - 4QFY16 Results Flash Note 

  • We make no change to our NEUTRAL rating, forecast and DDM-derived TP of SGD0.89, forward dividend yield of 6.9%.



Highlights

  • 4Q/FY16 DPS declined 2.7/1.6% YoY, meeting c.98% of our full year forecasts.
  • Income contributions were lifted by strong results from Hong Kong assets, offset by weaker performance in Singapore.
  • Positive rental reversion of 4%, mainly driven from Hong Kong and Singapore assets.
  • Portfolio occupancy remained stable at 96.2%.


Other takeaways

  • Management expects challenges to persist on, given the uncertain macroeconomics outlook. Thus, expecting pressure on rent rates.
  • Additionally, management noted that tenants are increasingly cautious, and slower to commit in the current environment.
  • Singapore assets came in weaker mainly due to the conversions of several single-user assets (SUAs) to multi-tenanted buildings (MTBs) amidst rising supply of warehouse supply.
  • c.15% of its net lettable area (NLA) faces lease expiries in FY16/17, of which 5.1% (6 buildings) are SUAs.
  • AEI works at Moriya Centre (Japan) and redevelopment of a SG asset (Toh Guan Rd) were completed in Mar 16, and is expected to make its respective contributions in FY16/17.
  • Gearing ratio stood at 39.6%, with a healthy interest coverage of 5.9x.


Our View: 

  • Aligned with MLT’s expectations of the industrial leasing market, we are not too optimistic too. As warehouse supply remains high in the
  • next two years amidst the weaker economic outlook, we opine that warehouse landlord would face resistance in hiking their rental rates.
  • As we see no catalyst to re-rate the counter, we remain Neutral, with no change in our assumption on MLT.





Ivan Looi RHB Invest | http://www.rhbinvest.com.sg/ 2016-05-03
RHB Invest SGX Stock Analyst Report NEUTRAL Maintain NEUTRAL 0.89 Same 0.89


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