UOB Kay Hian analyst Jonathan Koh has kept “hold” on Mapletree Logistics Trust (MLT) with an unchanged target price of $2.08.
Koh’s report on Nov 24 follows the REIT’s proposed acquisition of 17 modern Grade A logistics properties in China, Vietnam and Japan at a total acquisition cost of $1.47 billion.
See: Mapletree Logistics Trust to acquire 17 logistic assets in China, Vietnam and Japan for $1.4 bil
The proposed acquisitions will increase MLT’s assets under management (AUM) by 13.5% to $12.2 billion.
The portfolio includes seven logistics properties in China that are still undergoing stabilisation, whereby in-place rents and occupancy rates are below current market levels, notes Koh.
While the proposed acquisitions are estimated to be accretive to MLT’s FY2021 distribution per unit (DPU)by 2.2% on a pro forma basis, the “sizeable” equity fund raising could put the REIT’s unit price under pressure, he adds.
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Koh has kept his existing DPU forecasts unchanged for now.
“Accretive acquisitions [made] to rejuvenate and reposition towards modern specifications logistics facilities, domestic consumption and e-commerce [are catalysts to MLT’s share price],” says Koh.
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As at 12.30pm, units in MLT are trading 4 cents lower or 2.05% down at $1.91, or FY2022 P/B of 1.5 times and DPU yield of 4.4%.
Photo: MLT
