To The Moon

1. Introduction

$Mapletree Log Tr(M44U.SI)$ is a Singapore-based Real Estate Investment Trust (REIT) that focuses on logistics properties across the Asia-Pacific. Its portfolio has expanded significantly since its IPO in 2005, growing to 188 properties across nine markets, including Singapore, China, Japan, and Australia. In recent developments, MLT has completed divestments and acquisitions aimed at optimizing its asset mix and maintaining stable distribution to unitholders.

2. Business Overview

MLT’s business model centers on acquiring and managing income-generating logistics properties. It earns revenue primarily from rental income and leases these properties to logistics operators, e-commerce firms, and other tenants in high-growth sectors. Its revenue streams are geographically diversified, with Singapore, China, and Japan being key contributors.

3. Financial Health

For the quarter ended June 30, 2024 (1Q FY24/25), MLT reported gross revenue of SGD 181.7 million, a slight decrease compared to the previous year. Net property income came in at SGD 156.7 million. However, the amount distributable to unitholders dropped by 7.4% to SGD 103.7 million, reflecting higher borrowing costs and reduced gains from divestments.

4. Key Financial Ratios

• Profitability: Operating profit margin remains robust, driven by efficient property management.

• Liquidity: MLT maintains sufficient cash reserves (SGD 305.1 million as of June 2024) to meet short-term obligations.

• Debt Levels: Borrowings have increased to fund acquisitions, though they are managed with a prudent hedging strategy.

• Efficiency: Asset turnover remains healthy, given the focus on high-demand logistics hubs.

5. Competitive Position

MLT is a market leader in the logistics REIT sector within Asia, with one of the largest portfolios in the region. Its properties benefit from strategic locations in key urban logistics hubs, enhancing tenant retention and rental growth potential. Its main competitors include other logistics-focused REITs and developers, but MLT’s diversified portfolio gives it an edge.

6. Market Potential

The growth of e-commerce, increased demand for last-mile delivery infrastructure, and resilient supply chains support the long-term outlook for logistics properties. MLT is well-positioned to capitalize on these trends, with further potential to expand into emerging markets like Vietnam and India.

7. Investment Moat

MLT’s moat lies in its diversified portfolio across multiple countries, mitigating risks from individual market downturns. Additionally, long-term tenant relationships and high occupancy rates (consistently above 95%) provide a stable income stream. The trust’s ability to leverage Mapletree Investments’ expertise in asset management further strengthens its position.

8. Risks

MLT faces several risks:

• Interest Rate Risk: 30% of MLT’s loan is in JPY of which 11% are without interest rate hedge. Rising interest rates for JPY loans may increase borrowing costs and will likely be offset by interest rate decline in other currencies (RMB, HKD, SGD, etc.).

• Foreign Exchange Risk: With assets across different countries, currency fluctuations can impact income.

• Tenant Concentration Risk: Dependence on a few key tenants may pose risks if they default or leave.

9. Conclusion and What I am Doing

Given the long-term growth potential in logistics and MLT’s diversified portfolio, the REIT remains a solid investment. As MLT is one of my top holdings, I Will be adopting a buy on dip strategy since I believe in the sustained growth of e-commerce and supply chain infrastructure.

Please DYODD.