Mapletree Logistics Trust Review @ 19 July 2021

Basic Profile & Key Statistics

Mapletree Logistics Trust (MLT) is a logistics REIT that invests in 163 properties across 9 countries.

Performance Highlight

Gross revenue, NPI, distribution to unitholders and DPU increased YoY by 23.7%, 21.3%, 19.1% and 5.7% respectively. The increase is mainly due to higher revenue from existing properties, acquisitions completed in FY20/21 and redevelopment completion of Mapletree Ouluo Logistics Park Phase 2 in 1Q FY20/21. Exclude distribution from divestment, the DPU increased YoY by 10.3%.

Occupancy has improved slightly to 97.8% and rental reversion is at +2.2%.

There is a proposed acquisition of 9 Changi South Street 2 with a projected NPI yield of 6.2%.  This acquisition would be funded by debt and is expected to be completed by 3Q FY21/22. 

Related Parties Shareholding

• REIT sponsor's shareholding is high at 31.28%
• REIT manager's shareholding is slightly high at 1.12%
• Directors of REIT manager's shareholding is low at 0.02%

Lease Profile

• Occupancy is high at 97.8%
• Income in SGD/Major Currencies is low at 49.5%.
• WALE is moderate at 3.8 years
• Highest lease expiry within 5 years is moderate at 25.9% which falls in FY22/23
• Weighted average land lease expiry is slightly short at 55.33 years

Debt Profile

• Gearing ratio is moderate at 38.2%
• Cost of debt is low at 2.2%
• Fixed rate debt % is moderate at 75%
• Unsecured debt % is high at 91.3%
• WADM is long at 3.7 years
• Highest debt maturity within 5 years is low at 20% which falls in FY23/24
• Interest coverage ratio is high at 5.2 times
• Preferred/perpetual securities over debt is moderate at 9.3%

Diversification Profile

• Top geographical contribution is low at 31.2%
• Top property contribution is low at 9.1%
• Top 5 properties contribution is low at 22.1%
• Top tenant contribution is low at 7.6% 
• Top 10 tenants contribution is low at 26.2%
• Top 3 countries contribution is from Singapore, Hong Kong and China which contribute around 2/3 of GRI

Key Financial Metrics

• Property yield moderate at 5.2% 
• Management fees over distribution is high at 19.3% in which unitholders receive S$ 5.18 for every dollar paid 
• Distribution on capital is slightly high at 3.6%
• Distribution margin is high at 56%
• 1.9% of DPU is from distribution from asset disposal (exclude 5 divested properties in Japan and 7 Tai Seng Drive)

Trends

• Uptrend - DPU, NAV per Unit, Distribution Margin
• Flat - Distribution on Capital
• Downtrend - Interest Coverage Ratio, Property Yield

Relative Valuation

• P/NAV is at the average level for 1y and higher than +1SD for 3y and 5y
• Dividend yield is below the average level for 1y and lower than -1SD for 3y and 5y 

Author's Opinion

Favorable	Less Favorable
High REIT Sponsor's Shareholding	Low Directors of REIT Manager's Shareholding
High Occupancy	Low Income in SGD/Major Currencies
Low Cost of Debt	Non-Competitive Management Fees
High Unsecured Debt %	Interest Coverage Ratio Downtrend
Long WADM	Property Yield Downtrend
Well Spread Debt Maturity
High Interest Coverage Ratio
Low Top Geographical Contribution
Low Top Property & Top 5 Properties Contributions
Low Top Tenant & Top 10 Tenants Contributions
High Distribution Margin
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

MLT continues to achieve DPU growth despite the absence of distribution from the divestments of the 5 divested properties in Japan and 7 Tai Seng Drive. With this top-up ended by last quarter, the distribution from disposal % has reduced from 5.7% to 1.9%.

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.