S-REITs Weekly - UOB Kay Hian 2020-06-30: 0.8% Correction As The US Experienced A Second Wave Of COVID-19 Infections.

S-REITs Weekly - UOB Kay Hian Research | SGinvestors.io MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)

S-REITs Weekly - 0.8% Correction As The US Experienced A Second Wave Of COVID-19 Infections.




WHAT HAPPENED LAST WEEK


UOBKH S-REIT Index retraced 0.8% wow to 247.7 last week.

  • New daily confirmed cases in the US surged above the 40,000 mark to 40,588 last Thursday and 44,602 last Friday (previous peak: 43,438 on 6 Apr 20). New cases surged across a number of states, particularly in the Southeast and Southwest (Texas, California and Florida). The surge is likely caused by the lifting of lockdown restrictions, increased testing and community transmission. The rate of hospitalisations has risen. Some hospitals are nearing full capacity in their intensive care units.

Top outperformers.


Top underperformers.



SPOTLIGHT – MAPLETREE INDUSTRIAL TRUST (BUY/Target Price: S$3.08)


Further expansion in data centres.

  • Mapletree Industrial Trust (SGX:ME8U) has proposed to acquire the remaining 60% interest in 14 data centres in the US from sponsor Mapletree Investments for US$210.9m (S$299.5m). The 14 data centres with a total NLA of 2.3m sf are primarily leased on a core-and-shell basis with triple net leases on a WALE of 4.6 years. Occupancy is high at 97.4%.

Exposure to resilient data centre segment expands 7.4ppt to 39% of AUM.

  • North American data centres will account for a higher 32.5% share of Mapletree Industrial Trust's AUM, from 24.4%.
  • Overall, the hi-tech buildings segment, which includes data centres, will expand 4.9ppt to account for 59.9% of AUM. The proportion of freehold properties (by land area) will also increase from 37.9% to 51.8% of the enlarged portfolio. Some 97.8% of MRDCT’s portfolio has annual rental escalations of 2% and above.

DPU and NAV accretive.






Jonathan KOH CFA UOB Kay Hian Research | Peihao LOKE UOB Kay Hian | https://research.uobkayhian.com/ 2020-06-30
SGX Stock Analyst Report BUY MAINTAIN BUY 3.08 SAME 3.08



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