Mapletree Logistics Trust still hunting for major catalysts

Are acquisitions in Asia underway?

According to CIMB, underpinned by its long WALE (more than five years) and high occupancy, lease renewals and thus rental reversions should be fairly limited each year, with acquisitions/ development being critical sources of growth.

To this end, management is on the lookout for acquisitions in China, South Korea, Malaysia and Singapore and recently made a small acquisition in South Korea.

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However, with funding costs (both debt and equity) potentially on the rise, accretion could be capped, particularly if competition for assets continues to prop up capital values.

Staggered debt maturity. Asset leverage is a fairly healthy 34%, albeit a higher 41% if we consider MLT’s perpetual securities as debt as well. Maturities are, however, well-staggered, with no more than 20% of borrowings due in each year and the average debt maturity at a long 3.9 years.

Coupled with a fairly high 70% of loans hedged, this should limit MLT’s exposure to interest-rate hikes. We estimate that a 50bp increase in borrowing rates could reduce MLT’s DPU by 1.3%.