Mapletree Industrial Trust - Maybank Kim Eng 2021-07-28: Data-Driven Growth

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MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)

Mapletree Industrial Trust - Data-Driven Growth

Adding growth from US data centres

• Mapletree Industrial Trust (SGX:ME8U) delivered a strong 1Q22, as DPU rose 16.7% y-o-y/ 1.5% q-o-q (from a 13% larger unit base on the back of the recent S$823.3m EFR) with the consolidation of its 14 US data centre portfolio, contribution from 8011 Villa Park Drive, and absence of rent reliefs.
• Occupancy in Singapore has improved, even as rental recovery remains uneven.
• We raised Mapletree Industrial Trust's DPUs forecast by 3- 4% with the completion its recent US portfolio acquisition, and see further DPU-accretive deals, as management advances diversification efforts to deepen data centre concentration to 50-67% of AUM.
• Our DDM-based target price for Mapletree Industrial Trust (COE: 5.9%, LTG: 2.0%) rises to S$3.35. BUY.

Singapore occupancy, rents up q-o-q

• Mapletree Industrial Trust's portfolio occupancy increased q-o-q from 93.7% to 94.3%, mainly due to the better performance of its Singapore assets (from 92.9% to 93.4%), that was underpinned by improvements for its high-tech buildings, flatted factories and stack-up/ ramp-up property.
• Leasing remains competitive for its older business park assets, and tenant expansion at Synergy was on a 10-year term at lower rents. Gross rent rose 2.4% y-o-y and 3.9% q-o-q, (from -2.8% q-o-q in 4Q21) with absence of rental relief that was provided in 1Q21, and management expect these to bottom out over the next 6-9 months.

US acquisition adds 3.5% to DPU

• Its US$1.32b portfolio acquisition of 29 US data centres was completed on 22 properties jump from ~56% to ~66% of AUM (by NLA).

Data centre AUM to rise further

• See
  • Mapletree Industrial Trust's Share Price,
  • Mapletree Industrial Trust's Target Price,
  • Mapletree Industrial Trust's Analyst Reports,
  • Mapletree Industrial Trust's Dividend History,
  • Mapletree Industrial Trust's Announcements,
  • Mapletree Industrial Trust's Latest News.
• Mapletree Industrial Trust's gearing fell to 31.0% (from 40.3%) but should rise to ~39% in 2Q22 on the back of the ~25% jump in its AUM.
• Mapletree Industrial Trust's balance sheet remains markets and EFR opportunities.

Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-07-28

SGX Stock Analyst Report BUY MAINTAIN BUY 3.35 UP 3.250