Another Steady Quarter, Targeting AUM Growth Again

• Mapletree Logistics Trust (SGX:M44U)’s 2Q22 DPU rose 5.7% y-o-y and 0.6% q-o-q, helped by higher rental income and contributions from S$1.6b in acquisitions completed in FY21. DPU visibility is strong, underpinned by resilient occupancies due to steady demand growth, with upside to rents in FY23E, for its well-placed logistics AUM.
• While S$351.3m in acquisitions (in Australia, Malaysia, S.Korea and Singapore) were announced year-to-date, management is now eyeing more. Mapletree Logistics Trust's balance sheet is strong, and gearing was stable but could rise in the near term, as deal momentum returns to drive AUM growth, DPU accretion, and share price action.
• Our DDM-based target price for Mapletree Logistics Trust stays at S$2.35 (COE: 5.7%, LTG: 2.0%). Maintain BUY.

Better Reversions in HK, China, Malaysia and Vietnam

• Mapletree Logistics Trust's 2Q22 revenue and NPI rose 25.2% y-o-y and 21.5% y-o-y, with higher contributions reversion was stronger at +2.4% (vs +2.2% in 1Q22), led by its leases in Malaysia and Vietnam (+3.0%), Hong Kong (+2.6%) and China (+2.5%).

Strong Leasing Momentum, Positive Rent Trajectory

• Leasing momentum was strong with ~541k sqm and 3PLs, and we see room for its rental recovery to strengthen into the coming quarters.

Upside From Acquisitions, Rejuvenation

• Mapletree Logistics Trust's gearing was stable at fourth redevelopment project at 51 Benoi Road with potential GFA upside, could arrive in the coming months.

Source: Maybank Kim Eng Research - 26 Oct 2021