ALP REIT INVESTMENT CLUB
(05th March 2016)
Mapletree Logistics Trust (M44U.SI)
Close: $0.98 (5th March 2016)
12M -Target price: $1.05
1.) Type of Reit: Logistics
2.) Number of property in the portfolio: 118 (As of 31st Dec 2015)
Properties is diversified geographically around 8 Countries in Asia Pacific.
3.) Top 5 properties that generates the highest revenue (Decreasing order):
4.) Challenges: Strong Competition from Global Logistic Properties Ltd, Mapletree LogisticsTrust is REITS; it owns logistics properties that are managed by its manager and it is required by regulations to distribute 90% of its taxable income each year to its unitholders.
Global Logistic Properties on the other hand, is structured as a company. A company is not bounded by rules that require it to distribute any income as a dividend; as such Global Logistic Properties can perhaps place a little more focus on growing its assets.
REITs also have limits to the amount of debt they can take on, but a company has no such shackles; Global Logistic Properties thus has more flexibility when it comes to financing its business.
Size is another big differentiator between the two listed entities. While Mapletree Logistics Trust has a sizeable asset value of over S$5 billion, that is still relatively small when compared to Global Logistic Properties’ portfolio of US$33 billion.
1. Observing from a macro view, Ecommerce is driving further logistics outsourcing to third-party supply chain specialists. For e.g. the increase in market activity as noted in the investments of Alibaba Group Inc had made in Singapore Post Limited (SGX: S08). Thus, providing potential market activity in leasing warehouses occupancy.
2. Mapletree has initiated Portfolio rejuvenation strategy by selectively stop investing (Divestment) on low yielding, older assets with limited redevelopment potential. Capital released will be channelled into investments of modern, higher yielding assets.
6.) Significant events:
1. Maple had initiated and completed acquisitions of 3 quality, well-located warehouses (~S$295m) in 1H FY15/16S amounting to $295m to scale up presence in growth markets and rebalancing Portfolio.
2. Divest of 2 low yielding assets with older specifications in Singapore (total net divestment gain of S$10m).
*2012: 1 January 2011 to 31st March 2012
*2010: 1 January 2010 to 2010 December
8.) Recommendation: BUY. MapleTree Logistics is one of the largest logistics largest warehousing and logistics entities listed in Singapore’s stock market.
Increase market activity in eCommerce and Asia Pacific outsourcing logistics demand. Mapletree Logistics Trust is sponsored by Mapletree Investments, an investment firm with links to Temasek Holdings. The company itself never cease to improve its operations by maintaining high portfolio occupancy at above 90% and engaging into proactive lease managements for forward renewals
COMPILED BY: Andrew Ong
DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.