MAPLETREE LOGISTICS TRUST (SGX:M44U)
Mapletree Logistics Trust - Delivering AUM Growth
Adding S$1.4b assets in China, Vietnam and Japan
- Mapletree Logistics Trust (SGX:M44U)’s acquisitions have picked up pace post-1H22, as it added 17 Grade A logistics assets (average age of 1.6 years) in China, Vietnam and Japan for ~S$1.4b, which are set to boost its NLA by 18.3% and AUM by 13.5% to S$12.2b.
- While DPU accretion is low at ~1%, the assets are backed by strong fundamentals, with upside to rents and valuations in the medium term, underpinned by tight supply.
- We will revise our estimates and DDM-based S$2.35 target price for Mapletree Logistics Trust (COE: 5.7%, LTG: 2.0%) pending deal closure.
- Mapletree Logistics Trust's balance sheet is strong, and while S$1.8b in deals announced year-to-date exceeds the ~S$1.6b in FY21, management is eyeing more. BUY.
Sponsored assets at undemanding 5.1% NPI yield
- The portfolio of 16 sponsored assets – 13 in China and 3 in Vietnam - are Grade A, modern logistics facilities, with an average age of 1.5 years, committed occupancy of 91.0%, and a 2.9-year WALE (by NLA). 82% of occupiers serve the consumer markets and 30% of these are new (by gross revenue). A 12-month rental support embedded in the 5.1% NPI yield valuation should help cushion DPU as occupancies ramp up to 95-100%.
- The 43% jump in its China NLA should strengthen network benefits as 57% of its tenants are leasing space in more than one asset, up from 44% currently. Also, tighter ~4% market cap rates suggest potential for divestment gains in the medium term. Mapletree Logistics Trust now has 43 assets in China, up from 30, and it enters into three new provinces.
Largest asset in Japan to deepen market AUM
- The third-party acquisition, at S$403.8m and ~4.0% stabilised NPI yield, is Mapletree Logistics Trust’s 19th and largest logistics facility in Japan by NLA and value. It is its third asset in Greater Nagoya, the country’s largest manufacturing hub, with its industry representing ~25% of 2019 shipment value. It is well-sited within an established industrial and logistics cluster with high connectivity to the port and airport, and Greater Osaka and Tokyo.
- Demand from 3PLs remains strong, against tight supply of large modern warehouse space, and management expects occupancy to improve to 100% in the next 12 months.
Mapletree Logistics Trust eyeing 2.2%/4.4% DPU/NAV accretion
- Mapletree Logistics Trust is eyeing 2.2% DPU and 4.4% NAV accretion for the transactions, as it raises S$700m in new equity, but we expect this could be lower at ~1% given the S$1.82-1.91 pricing range (versus an illustrative S$1.92 unit value).
- We expect Mapletree Logistics Trust's gearing to stay at 39.0% post-deal, with an estimated S$1.9b in debt headroom (at 45% limit).
- Management sees a strong deal flow to 4Q22 from third-party assets, as it awaits regulatory approval for its proposed S$250m fourth redevelopment project in Singapore.
- See
Chua Su Tye
Maybank Kim Eng Research
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https://www.maybank-ke.com.sg/
2021-11-23
SGX Stock
Analyst Report
2.350
SAME
2.350
