Mapletree Logistics Trust

Mapletree Logistics Trust: 2QFY15 results in line. DPU rose 3% y/y to 1.88¢, while distributable income rose 4% to $46.3m, while revenue increased 6% to $81.5m and NPI climbed 3% to $68.7m, mainly due to two acquisitions in Malaysia and Korea and higher revenue from existing assets in Singapore and HK, partly offset by lower occupancy in several newly converted multi-tenanted building in Singapore. Occupancy stood at 97.2%, with WALE of 4.6 years. Aggregate leverage of 33.3%, with 76% debt hedged or fixed rated. The transition of some properties from single-user to multi-tenanted based on JTC’s recent changes in the subletting policy has made the leasing situation in Singapore much more challenging. This is because multi-tenanted buildings tend to have higher vacancy rates, and higher regulatory restrictions on the use of industrial space. On that front, MLT aims to achieve growth from overseas acquisitions. Over the quarter, MLT completed 4 acquisitions for $149m in Malaysia, South Korea and China of which the latter two were via the sponsor’s pipeline. The Chinese acquisitions are expected to generate an initial net property income yield of ~7.5%, and are expected to be DPU-accretive. NAV of $0.97 implies 1.2x P/B. MLT trades at annualized 2QFY15 yield of 6.3%. Latest broker ratings: Deutsche maintains Hold with TP of $1.19 Daiwa maintains Hold with TP of $1.20 CIMB maintains Add with TP increased to $1.31 from $1.24