Monday, October 21, 2013

Mapletree Logistics Trust: Delivering steady growth (OCBC)

Mapletree Logistics Trust:
Fair value S$1.11
add: 12m dividend forecast S$0.073
versus: Current price S$1.09

Delivering steady growth
• 2QFY14 DPU up 6.4% YoY
• Positive reversion of 24% achieved
• New redevelopment project in early FY15

Mapletree Logistics Trust (MLT) reported 2QFY14 DPU of 1.82 S cents, representing a 6.4% growth YoY. We deem the results to be in line with our expectations, as 1HFY14 DPU of 3.62 S cents have met 49.9% of our full-year DPU forecasts.
While the global economic outlook remains murky, leasing demand at MLT’s logistics facilities has held firm. Going forward, MLT reiterated that it will continue to optimize the portfolio yield through repositioning, enhancement and redevelopment opportunities. We understand that the redevelopment of Mapletree Benoi Logistics is on track for completion in 3QFY14, and that MLT will be embarking on its next redevelopment project at 5B Toh Guan Road in early FY15. We make minor adjustments to our forecasts but lower our fair value marginally to S$1.11 (S$1.15 previously) on higher risk-free rate assumptions. Maintain HOLD.

2QFY14 results within expectations
Mapletree Logistics Trust (MLT) reported a 1.3% YoY drop in 2QFY14 NPI to S$66.6m, as its Japan portfolio saw lower translated income on weaker JPY. Stripping out the forex impact, NPI would have increased by 3.4% due to positive rental reversions and contributions from its past three acquisitions. Total amount distributable to unitholders grew at a faster pace of 7.5% to S$44.5m, as MLT substantially hedged its income streams from Japan, benefitted from lower financing costs, and distributed S$0.6m (0.025 S cents/unit) in divestment gains from 30 Woodlands Loop. For the quarter, DPU came in at 1.82 S cents, representing a 6.4% growth YoY. We deem the results to be in line with our expectations, as 1HFY14 DPU of 3.62 S cents have met 49.9% of our full-year DPU forecasts (consensus: 51.0%).

Firm leasing demand at MLT’s portfolio
While the global economic outlook remains murky, leasing demand at MLT’s logistics facilities has held firm. Starting with 15% of its leases due for expiry in FY14, MLT has managed to renew/replace ~62% of the leases. Portfolio occupancy also improved 50bps QoQ to 98.7%, boosted by higher take-up rates at MLT’s China, Hong Kong and Korea portfolios. More importantly, positive rental reversion of 24% was achieved, higher than the 17% growth seen in previous quarter. This is somewhat more positive than management’s previous guidance for a moderating rate going forward.

Continued focus on yield optimization
MLT reiterated that it will continue to optimize the portfolio yield through repositioning, enhancement and redevelopment opportunities. We understand the redevelopment of Mapletree Benoi Logistics is on track for completion in 3QFY14, while pre-commitment is unchanged at 94%. Following this, MLT will be embarking on its next redevelopment project at 5B Toh Guan Road in early FY15, which will see the site transform from a 3-storey warehouse to a 6-storey modern ramp-up facility (GFA up 2.7x). We make minor adjustments to our forecasts but lower our fair value marginally to S$1.11 (S$1.15 previously) on higher risk-free rate assumptions. Maintain HOLD.



Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 21/10/13

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