Diversification to ease headwinds for Mapletree Logistics Trust

Most of its tenants have been cautious on expansionary plans.

Mapletree Logistics Trust’s (MLT) active asset management strategy to diversify its portfolio should help the REIT to remain resilient against an uncertain global backdrop, according to a report by DBS Group Research.

MLT’s manager expressed that its tenants have been cautious, as most of them have been careful on expansionary plans whilst some are looking to consolidate their operations.

A separate report by Maybank Kim Eng views that a company may see a pick-up in rents only from late 2020, from easing supply. “Its WALE is lower at 4.4 years (from 4.6 years), but single-user asset expiries remain low at 1.6-3.9% from FY20-22E,” the report stated

Still, the trust completed the acquisitions of seven modern logistics properties in Q4 2019: one in Malaysia, two in Vietnam and 50% interest in four properties in China. Maybank Kim Eng expects the trust to see rising revenue and net property income (NPI) contribution from these recent acquisitions.

Furthermore, another report by OCBC Investment Research noted these countries to be amongst the fastest growing e-commerce markets.

Based on a company announcement, MLT saw its net property income (NPI) rose 3.9% YoY to $108.56m in Q3 2019, whilst gross revenue edged up 0.3% to $121.15m.