Mapletree Logistics Trust's DPU could rise a further 0.2% in 2019: analyst

The firm's Q3 DPU was its highest since 2015.

Mapletree Logistics Trust’s (MLT) distribution per unit (DPU) is forecasted to inch up another 0.2% in 2019 following the handful of properties the firm acquired in Q3 FY18/19, according to OCBC Investment Research (OIR).

MLT reported a strong set of results in Q3 with its net profit income jumping 25.9% YoY to $104.49m from $83.02m for the same period in 2017. Likewise, gross revenue climbed 23% YoY to $120.8m. The increases were attributed to organic growth from its existing portfolio as well as contributions from its acquisitions in Hong Kong, Singapore, Australia, Vietnam and South Korea.

Also read: Mapletree Logistics Trust NPI climbed 25.9% to $104.49m in Q3

The firm’s DPU also advanced 5% YoY to $0.02 in Q3 from $0.019, which OIR said was due to higher borrowing costs and a larger unit base. “This was the strongest YoY growth delivered by MLT since Q1 2015,” analyst Andy Wock Teck Ching highlighted.

Besides a healthy DPU growth, MLT reported a steady 4.5% increase in rental reversions during the quarter driven by its overseas acquisitions. Additionally, its portfolio occupancy held firm at 97.7%, with only China recording a dip in occupancy rates from 98.3% to 95.8%, OIR noted.

“The drop in occupancy rates in China was largely due to a return of space from JD.come at Zhejiang but MLTM has found replacement tenants for a portion of the vacated space,” DBS Equity Research explained in its report. It further stated that as MLT continues to ramp-up its properties, the firm will continue to see steady occupancies given the strong asset attributes.

Also read: Mapletree Logistics Trust's DPU could grow 3% by 2020: analyst

MLT continued to diversify its portfolio in Q3, making its maiden entry into the Brisbane logistics market with the acquisition of the Coles Distribution Centre warehouses that is expected to have a NPI yield of 5.7%. A day later, it completed the acquisition of the Wonjin Logistics Centre in South Korea for $46.4m and has an expected initial NPI yield of 6.5%, OI revealed.

“Last but not least, MLT entered into a conditional asset transfer agreement with Unilever International to acquire a warehouse in Binh Duong province, Vietnam for a purchase consideration of approximately $43m,” Ching noted. “This property is designed with Grade A building specifications and is expected to generate an initial NPI yield of 8.3%.”