Mapletree Group of REITs - DBS Research 2019-07-18: In The Sweet Spot

Mapletree Group of REITs | SGinvestors.io MAPLETREE COMMERCIAL TRUST (SGX:N2IU) MAPLETREE NORTH ASIA COMM TR (SGX:RW0U) MAPLETREE INDUSTRIAL TRUST (SGX:ME8U) MAPLETREE LOGISTICS TRUST (SGX:M44U)

Mapletree Group of REITs - In The Sweet Spot




At the sweet spot that matters.

  • The four Mapletree Group of REITs have total assets of S$4.6-8.1bn which we believe is a sweet spot for investors to remain vested for the longer term.
  • This size affords sufficient scale to pursue selective redevelopments (a regular strategy for Mapletree Industrial Trust and Mapletree Logistics Trust) and deliver higher returns without materially affecting their DPU.
  • Furthermore, the REITs are in positions to pursue larger-sized acquisitions in the S$500m-1bn range which can still move earnings materially. With S$4.5-6.0bn market cap and daily liquidity of S$12-24m, we believe this also attracts the widest range of investors, thereby translating into tighter yields than their peers.


Justified premium valuations across the Mapletree REITs place them in a virtuous cycle of growth.

  • Following the individual listings of the four Mapletree REITs, we found that all have delivered among the top five highest total returns in part due to their consistently delivery of DPU growth (or “certainty of growth”), a trait that goes down well with investors.
  • We sense a strong perception amongst investors that their Sponsor is unitholder-friendly which is shown in the premium valuations of the Mapletree-backed REITs. This has led to a favourable cost of capital, which positions all four REITs to pursue accretive acquisitions in the future. This should create a positive virtuous cycle of DPU accretion, leading to higher share prices and greater upside from an M&A strategy.
  • On that front, we believe that Mapletree Commercial Trust is now best positioned to acquire next and we now assume that Mapletree Commercial Trust buys Mapletree Business City II. We revise our Target Price to a new street-high Target Price of S$2.25.


Assets to ride cycle.






Mervin SONG CFA DBS Group Research | Derek TAN DBS Research | Carmen TAY DBS Research | https://www.dbsvickers.com/ 2019-07-18
SGX Stock Analyst Report BUY MAINTAIN BUY 2.250 UP 2.00
BUY MAINTAIN BUY 1.650 UP 1.60
BUY MAINTAIN BUY 2.500 SAME 2.500
BUY MAINTAIN BUY 1.850 UP 1.60



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