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Mapletree Logistics Trust - Maybank Research 2022-07-22: Reversions Improving

MAPLETREE LOGISTICS TRUST (SGX:M44U) | SGinvestors.io MAPLETREE LOGISTICS TRUST (SGX:M44U)

Mapletree Logistics Trust - Reversions Improving


Strong quarter y-o-y, stay at BUY

  • Mapletree Logistics Trust (SGX:M44U)’s 1Q23 (1 Apr 2022 to 31 Jun 2022) DPU was +5% y-o-y / flat q-o-q, driven by higher rental income from a larger AUM. The performance was in line with consensus, and slightly above our estimates.
  • Our forecasts for Mapletree Logistics Trust are unchanged, although we see upside to earnings from potentially stronger-than-expected rental recovery, acquisitions and divestment gains.
  • Mapletree Logistics Trust's valuations are undemanding at ~5% yield, backed by high DPU visibility, which is underpinned by resilient occupancy amid steady growth in demand, and improving rents in FY23E.



Stable occupancy overall, set to improve in China

  • Mapletree Logistics Trust's portfolio occupancy was stable at 96.8% in 1Q23 (vs 96.9% in 4Q22) as higher occupancies in Japan and Hong Kong SAR, offset dips in Singapore, South Korea and China.
    • Occupancy in Singapore fell to 98.3% (from 99.0%) due to conversion of a single-user asset to a multi-tenanted property.
    • Occupancy in China was lower at 92.9% (from 93.1%) due to non-renewals in tier-2 cities (Guiyang, Changsha and Zhengzhou), but management expects this to improve at end-2Q23 as lockdowns ease after which occupancy should strengthen.


Leasing strong, rental reversion +3.4%

  • Leasing was strong and ~6% of its portfolio was renewed or replaced (vs ~5% in 4Q22). Lease expiry of single assets over FY23-24 are low at 2.1- 4.6% with WALE (by NLA) stable at 3.4 years (vs 3.5 years).
  • Mapletree Logistics Trust's portfolio rental reversion was stronger at +3.4% (vs +2.9% in 4Q22), led by leases in Singapore (at +4.3%) with Amazon’s renewal at 5B Toh Guan Road East, India (+4.1%), Vietnam (+3.9%) and Japan (+3.7%). We expect reversions to remain positive across its key growth markets, and to strengthen in Australia and China’s tier-1 cities.

Sound balance sheet, eyeing deals and divestments






Chua Su Tye Maybank Research | https://www.maybank-ke.com.sg/ 2022-07-22
SGX Stock Analyst Report BUY MAINTAIN BUY 2.15 DOWN 2.250



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