Mapletree Logistics Trust Review @ 26 July 2023

$MAPLETREE LOGISTICS TRUST(M44U.SI)$

Basic Profile & Key Statistics

• Main Sector(s): Logistics

• Country(s) with Assets: Singapore, China, Hong Kong, Japan, Australia, South Korea, Malaysia, Vietnam & India

• No. of Properties (exclude development/associate/fund): 190

Key Indicators

Performance Highlight

Gross revenue and NPI declined YoY mainly due to the depreciation of RMB, JPY, KRW and AUD against SGD. Borrowing costs have increased as well as a result of higher interest rates. However, the amount distributable to unitholders and DPU increased slightly YoY due to higher distribution from divestment proceeds as well as full distribution of written back provision of capital gain tax. Excluding distribution from divestment proceeds (for both periods) and capital gain tax, the amount distributable to unitholders declined by 3% and DPU declined by approx. 6%.

Rental Reversion

Rent reversion for the latest quarter is at +4.2%.

Acquisition

In the latest quarter, MLT completed the acquisition of these 8 properties.

Divestment

MLT divested 2 properties in Malaysia this month at a premium to valuation.

Development

The demolition of 51 Benoi Road has been completed and construction is commenced this month. The redevelopment is expected to be completed by 1Q 2025.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Above median by 10% or more

• REIT Manager's Shareholding: Below median by 20% or more

• Directors of REIT Manager's Shareholding: Below median by 20% or more

Lease Profile

• Occupancy: ± 5% from median

• Income in SGD/Major Currencies: Below median by 20% or more

• WALE: Below median by 20% or more

• Highest Lease Expiry within 5 Years:  ± 10% from median; Falls in FY23/24

• Weighted Average Land Lease Expiry: Below median by 20% or more

Debt Profile

• Gearing Ratio: ± 10% from median

• Gearing including Perps: ± 10% from median

• Cost of Debt: Below median by 20% or more

• Fixed Rate Debt %: ± 10% from median

• Unsecured Debt %: ± 10% from median

• WADM: Above median by 20% or more

• Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY26/27

• Interest Coverage Ratio: ± 10% from median

Diversification Profile

• Top Geographical Contribution: Below median by 20% or more

• Top Property Contribution: Below median by 20% or more

• Top 5 Properties' Contribution: Below median by 20% or more

• Top Tenant Contribution: Below median by 20% or more

• Top 10 Tenants' Contribution: Below median by 20% or more

Key Financial Metrics

• Property Yield: ± 10% from median

• Management Fees over Operating Distributable Income: Above median by 20% or more; $4.12 distribution for every dollar paid 

• Operating Distributable Income on Capital: Below median by 10% or more

• Operating Distributable Income Margin: Above median by 10% or more

• Operating Distribution Proportion: Below median by 5% or more

DPU Breakdown

• TTM DPU Breakdown:83.6% from Operation13% from Management Fees Paid in Units0.4% from Income Support3% from Proceeds from Divestment 

Trends

• Uptrend: DPU from Operation, NAV per Unit

• Flat: Occupancy

• Slighy Downtrend: Operating Distributable Income Margin

• Downtrend: Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital

Relative Valuation

• P/NAV: Average for 1y, 3y, & 5y

• Dividend Yield: Average for 1y, 3y, & 5y

Author's Opinion=

Compared to the previous quarter, despite improved gross revenue and NPI, the distribution from operation slightly declined after offsetting management fees paid in units, divestment gain proceeds, and a one-off capital tax gain. Unfortunately, the lack of a detailed breakdown for the "adjustment for net effect of non-tax deductible items and other adjustments" in the quarterly financial statements (NOTE A in the distribution statement) makes it hard to fully understand this decline. Nonetheless, let's observe next quarter to see if the recent acquisition can fill the gap left by the one-off capital tax gain and the ending of divestment gain proceeds.

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.