ESR-LOGOS REIT - Maybank Research 2024-11-07: Stable Operations; Maintain BUY

• ESR-LOGOS REIT reported 9M24 revenue and NPI of S$272.5m/S$192.7m, achieving 74.6%/74.3% of our full-year forecast.
• Consistent with trends in 1H24, lower revenue (-6.3% y-o-y) in 9M24 was due to recent divestments, leasing downtime at 2 Fishery Port due to redevelopment, and transient dip in occupancy.
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Sustained strong reversions

• ESR-LOGOS REIT's 3Q24 revenue of S$91.6m dipped marginally while NPI of S$64.9m was flat. Portfolio occupancy is largely stabilized at around 91% (-10bps q-o-q).
• Earlier in Jul 24, management revised its guidance for full-year rental reversion to ~9%. 9M24 reversions held up at 11.0%, led by strong logistics segment (+14.8%), hi-spec (+13.4%) and general industrial assets (+8.8%). Business parks continued to deliver positive reversion of +2.4% despite sector headwinds.

Updated financing methods

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• ESR-LOGOS REIT raised S$100m by issuing perpetual securities (cost of debt: 6.00%) to fund the remaining capital outlay.
• Meanwhile, management took the opportunity to replace part of the existing perps outstanding (S$74.75m, cost of debt: 6.632%) with a slightly cheaper rate of 6.00%.

Updates to balance sheet

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Li Jialin Maybank Research | https://www.maybank.com/ 2024-11-07 SGinvestors.io

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