Mapletree Logistics Trust - OCBC Investment 2022-04-29: Good Performance


Mapletree Logistics Trust - Good Performance

  • Mapletree Logistics Trust's 4QFY22 (Jan 2022 to Mar 2022) distribution per unit (DPU) rose 5.0% y-o-y to S$0.02268.
  • Positive 4QFY22 rental reversions of 2.9% although occupancy inched down.
  • Higher aggregate leverage ratio of 36.8%, notwithstanding solid revaluations gains.

Mapletree Logistics Trust's 4QFY22 results in-line with expectations

  • Mapletree Logistics Trust (SGX:M44U)’s 4QFY22 results met our expectations, with gross revenue and net property income (NPI) increasing 16.5% and 14.9% y-o-y to S$182.9m and S$157.1m, respectively. DPU rose 5.0% y-o-y to S$0.02268. If we exclude distribution from divestment gains, Mapletree Logistics Trust’s adjusted DPU would have increased 8.7% y-o-y to S$0.0223.
  • For FY22, Mapletree Logistics Trust’s NPI jumped 18.6% to S$592.1m, while DPU grew 5.5% to S$0.08787 and was 1.8% above our forecast.
  • Looking ahead, Mapletree Logistics Trust expects minimal impact from rising utility costs, given that its landlord’s share is for the common areas and that forms ~2-3% of its overall property operating expenses.
  • Mapletree Logistics Trust has also achieved a 31% increase in its solar generating capacity to 13.8 Megawatt peak (MWp) in FY22 and its longer-term target is to double its solar energy generating capacity by 2030 as compared to its FY21 baseline.

Positive rental reversions of 2.9%; portfolio occupancy declined slightly to 96.7%

  • Mapletree Logistics Trust achieved overall portfolio rental reversions of 2.9% in 4QFY22, led by India (+5%), Vietnam (+4%), South Korea (+3.9%) and China (+3.1%).
  • Mapletree Logistics Trust's portfolio occupancy declined slightly by 1.1 percentage points (ppt) quarter-on-quarter (QoQ) to 96.7% due to higher vacancies in Singapore, South Korea and China. Full occupancy was achieved in India, Vietnam and Australia.
  • Management highlighted that while it remained largely sanguine on its outlook, it was more cautious on China given the current COVID-19 situation.
  • Performance has been mixed, with Tier-1 cities still benefiting from tight supply and a strong consumer base, thus supporting high occupancy rates of ~95%. On the other hand, the Tier-2 and lower tier cities have experienced softer sentiment, with tenants less aggressive in their expansion plans. Occupancy rates in these cities are expected to hover around the low- 90% level, but positive rental reversions are still expected over the next 12 months.
  • Minimal provisions for rental rebates (~S$400k) have been made in 4QFY22 notwithstanding the resurgence in COVID-19 cases in China.

Aggregate leverage increased to 36.8% notwithstanding solid revaluation gains

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2022-04-29
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