Mapletree Logistics Trust - OCBC Investment 2023-05-04: Remaining Active On Capital Recycling Activities

• Mapletree Logistics Trust’s 4QFY23 (Jan to Mar 2023) results met our expectations. Gross revenue and net property income (NPI) fell 2.2% and 1.8% y-o-y to S$178.9m and S$154.3m, respectively. This was attributed to the depreciation of several foreign currencies against the S$, but partially offset by contribution from acquisitions.
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• Management continues to expect the biggest headwinds from currency fluctuations even though ~77% of its estimated distributable income over the next 12 months has been hedged or derived in S$.
• For FY23, Mapletree Logistics Trust’s NPI rose 7.2% y-o-y to S$634.8m, while DPU increased 2.5% y-o-y to S$0.09011 and accounted for 100.2% of our forecast.

Portfolio occupancy remained high at 97.0% while positive rental reversions of 3.1% were achieved

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• Management sounded a more cautious tone on its outlook on China, especially for Tier-2 and lower cities. Some of its e-commerce tenants in China have seen slower growth and also turned more cautious, with a few of them providing notice in advance that they would be downsizing approximately 10-20% of their space.
• Rental reversions will also be weak for the next couple of quarters in China (+0.6% in 4QFY23). For Mapletree Logistics Trust’s overall portfolio, rental reversions came in at +3.1%, and this was driven by Singapore (+5.0%), Malaysia (+4.5%), Vietnam (+4.4%) and Korea (+4.0%).

Aggregate leverage ratio declined to 36.8%; active on capital recycling

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-05-04 SGinvestors.io

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