Mapletree Logistics Trust (MLT) reported 1QFY15 NPI of S$69.0m and distributable income of S$46.6m, up 5.6% and 6.0% YoY respectively. The improved performance was mainly due to contribution from its asset enhancements, acquisitions and strong rental reversion of 12.0%. DPU for the quarter was similarly up by 5.6% to 1.90 S cents. This is in line with our expectations, given that the DPU met 24.9% of our full-year forecasts.

Going forward, MLT expects the recent acquisitions of the Iskandar Malaysia property and Daehwa Logistics Centre to contribute to its DPU. In a separate announcement, MLT also proposed to acquire a logistics facility known as Mapletree Zhengzhou Logistics Park in Henan, China from its sponsor for RMB205.6m (~S$41.1m). We understand that the property is expected to generate an initial NPI yield of 8.0% and be accretive at the distribution level. We will be participating in MLT’s results briefing later in the morning. For now, we place our S$1.10 fair value and Hold rating under review.

Source: OCBC Research - 22 Jul 2014