Mapletree Logistics Trust

Mapletree Logistics Trust’s 3QFY16 results were in line. DPU was flat y/y at 1.87¢, while distributable income inched 0.6% to $46.5m.

Revenue climbed 7.3% to $88.9m, while NPI rose 6.7% to $74.1m, driven by acquisitions, positive rent reversions and a stronger HKD, offset by multi-tenanted buildings conversions, the absence of 76 Pioneer Road (undergoing redevelopment), and weaker MYR.

Distributable income climbed at a slower clip than NPI due to a 44.7% surge in borrowing costs to $12.1m due to recent acquisitions.
Occupancy was flat q/q at 96.9%, with WALE of 4.8 years.
Aggregate leverage inched 0.2ppt q/q to 39% with weighted average interest rate of 2.4% (+10 bps q/q). 80% of interest costs are fixed rated.
Management guides that the leasing market is challenging, as tenants delay decision making over the renewal of leases and take-up of new space.
To date, 93% of the 692,000 sqm of leases due for expiry in FY16 have been renewed. Tenant retention and the management of the conversion of single-user buildings into multi-tenanted will remain MLT’s key focus.
MLT is currently trading at 8.2% annualized 3QFY16 yield, and 0.9x P/B.
Latest broker ratings:
DBS Vickers maintains Buy with TP of $1.15
Deutsche Bank maintains Buy with TP of $1.10
OCBC upgrades to Buy from Hold with TP unchanged at $1.04
Daiwa maintains Outperform, cuts TP to $1.04 from 1.13
RHB maintains Neutral with TP of $0.93