SINGAPORE (March 7): CIMB forecasts that Mapletree Industrial Trust (MINT) could deliver one of the highest 3-year distribution per unit (DPU) growth in the real estate investment trust (REIT) sector, on the back of its built-to-suit data centres.
Reiterating that MINT is one of its picks for the sector, CIMB is keeping its “add” recommendation on MINT with an unchanged target price of $1.68.
MINT on Monday announced the development of a $60 million six-storey data centre facility for a new client. To be located in the western region of Singapore, the project is expected to be completed in the second half of 2018.
The initial lease term is around 10 years, with staggered rental escalations.
(See also: Mapletree Industrial Trust to develop $60 mil build-to-suit data centre)
“The development is in line with MINT’s focus on growing its hi-tech buildings segment,” says CIMB lead analyst Yeo Zhi Bin in a Monday report. “This project is set to bolster FY19F growth.”
Yeo notes that MINT should also see stabilised contributions from the built-to-suit hi-tech industrial building at Depot Road for tech giant for Hewlett-Packard from Dec 2018 onwards. In addition, MINT should see initial contributions from its new hi-tech building at Kallang Basin 4 cluster.
“Given the BTS for HewlettPackard and the asset enhancement initiative at Kallang Basin 4, we forecast MINT to deliver a 3-year DPU CAGR of 2.7% through FY16-19F, one of the highest in the sector,” says Yeo.
As at 12.23pm, units of Mapletree Industrial Trust are trading 1 cent lower at $1.68.
