Challenges abound. First of all, the risk to CLI’s REITs is obvious. The operational underperformance of Mapletree Pan Asia Commercial Trust (MPACT), Mapletree Logistics Trust (MLT) and Mapletree Industrial Trust (MINT) compared to their peers this year are potential challenges.
On Nov 19, JP Morgan analysts Mervin Song and Terence Khi said the quiet part out loud. “Investor feedback has been mixed following press reports regarding a potential combination between CapitaLand Investment (CLI) and Mapletree Investments as well as a possible carve-out of CLI’s China assets,” the analysts write.
Positive responses from investors circled around the prospect of CLI acquiring Mapletree’s fund management business at an attractive valuation, the exclusion of Mapletree’s development assets and investment properties from the deal, a reduction in CLI’s China exposure, anticipated cost synergies post-merger, and the potential for immediate accretion to CLI’s EPS and ROE, the duo pointed out.
