MAPLETREE LOGISTICS TRUST (SGX:M44U)
Mapletree Logistics Trust - Riding The Renewables Wave ~ Logistics Play With An ESG Touch
- Mapletree Logistics Trust scores 58 under our expanded ESG 2.0 methodology, above the average of 50.
- Mapletree Logistics Trust has executed well on solar energy adoption, green financing and waste recycling. It’s working towards a more comprehensive framework to achieve carbon neutrality by 2030. Nonetheless, disclosures on interim targets could improve its score further.
Ready for a closer look
- 2021 was a milestone year in Mapletree Logistics Trust (SGX:M44U)’s ESG course, in our view - inaugural submission to GRESB review, introducing new material matters and targets.
- We also note two new markets (China and Malaysia) came under Mapletree Logistics Trust’s disclosure scope in FY21. New initiatives such as green lease and accelerated green certification are expected in FY23. Mapletree Logistics Trust is conceptualizing a green building certification roadmap and has committed to adding 25% green certified GFA in FY23 (from FY22 baseline).
- Overall, Mapletree Logistics Trust scores well in our ESG 2.0 review. While Mapletree Logistics Trust is working towards net zero for Scope 1 and 2 emissions by 2030, more ambitious interim targets on energy intensity reduction could drive a higher score.
Strong exposure to renewable energy
- Mapletree Logistics Trust stands out to us with the highest percentage of renewable energy generated and used among industrial S-REITs. In FY22, Mapletree Logistics Trust generated 13.9m kWh of electricity, equivalent to 6109 tCO2e.
- Notably Mapletree Logistics Trust consumed 5.8m kWh of solar generated, and sold the excess to the grid, against the backdrop of utility rate hikes. We expect Mapletree Logistics Trust to deepen its commitments, with targets set to double the capacity by 2030.
Prudent capital management
- Mapletree Logistics Trust’s gearing stands at 37.2% as of 1H22 (vs. 36.8% in 1Q22), with an estimated debt headroom of S$0.7b at 40% limit. Cost of borrowing is low at 2.3% compared to peers, while 80% borrowing is on fixed rate.
- Meanwhile, Mapletree Logistics Trust has successfully extended its inaugural sustainability-linked loan which is pegged to its rooftop solar installation programme. The aggregate green financing instruments of S$800m now account for 16.1% of Mapletree Logistics Trust’s total borrowing.
- See
- Maintain BUY recommendation on Mapletree Logistics Trust with DDM-based target price of S$2.15 (COE: 6.1%, LTG: 2.0%).
Read also ESG assessment reports of other industrial S-REITs:
- CapitaLand Ascendas REIT - Maybank Research 2022-10-06: Front Runner In The ESG Race Among Industrial S-REITs.
- ESR-LOGOS REIT - Maybank Research 2022-10-06: Steady Progress, New-Economy Play With Low ESG Risk.
- Mapletree Industrial Trust - Maybank Research 2022-10-06: Improving Fundamentals, Remains Focused On ESG.
Li Jialin
Maybank Research
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https://www.maybank-ke.com.sg/
2022-10-06
SGX Stock
Analyst Report
2.150
SAME
2.150
