Mapletree Industrial Trust - Maybank Kim Eng 2021-05-20: Scaling Up Data Centres

MAPLETREE INDUSTRIAL TRUST (SGX:ME8U) | SGinvestors.io MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)

Mapletree Industrial Trust - Scaling Up Data Centres


Adding to US data centres

  • Mapletree Industrial Trust (SGX:ME8U) has picked up its pace on acquisitions with its latest US$1.32b US data centre deal. The investment, at an initial 5.1% NPI yield is DPU and NAV accretive. It should boost the segment’s contribution from ~41% to ~54% of its AUM, while strengthening DPU visibility from a longer 4.6-year WALE (from 4.0 years).
  • With its portfolio recalibration plans well underway, we see further DPU-accretive deals, as Mapletree Industrial Trust's management advances diversification efforts to deepen data centre concentration to 50-67% of AUM.
  • Our DPUs forecast are intact while our DDM-based target price for Mapletree Industrial Trust stays at S$3.25 (COE: 6.0%, LTG: 2.0%) pending deal closure. BUY.


Acquires US$1.32b portfolio from Sila Realty Trust

  • Mapletree Industrial Trust will acquire a portfolio of 29 US data centres from Sila Realty Trust (previously Carter Validus Mission Critical REIT) for US$1.32b (S$1.78b) at a 1.1% discount to end-Apr 2021 valuations. See Mapletree Industrial Trust's Announcements.
  • The properties are 87.8% occupied, mostly freehold, primarily powered-shell (~64% of gross rental income) and on triple-net leases (~82%). They are tenanted to established credit-worthy names; three will rank within its top ten (at 1.4-2.5% of gross rental income), and backed by a long 7.9-year WALE, with 89.4% of leases with +1.5-3.0% pa rental escalations.
  • Post-deal, Mapletree Industrial Trust's freehold properties are set to jump from 55.9% to 65.8% of AUM (by NLA).

Data Centres underpinned by positive growth fundamentals

  • The portfolio will add assets in 4 new US markets (Chicago, Los Angeles, Silicon Valley, and Houston) to improves at 250 Williams Street in Atlanta.


Deal is DPU and NAV accretive






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-05-20
SGX Stock Analyst Report BUY MAINTAIN BUY 3.250 SAME 3.250



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