Mapletree Logistics Trust could recover through warehouse purchase

Its tenancy risk has risen in the near-term.

Mapletree Logistics Trust’s (MLT) plan to buy five warehouses could push the five into recovery amidst near-term rise in tenancy risks, Maybank Kim Eng said.

However, the bank thinks funding for the purchase is still unclear as it will take time to sell its $200m worth of MLT’s low-yielding assets.

Also read: Mapletree Logistics Trust to buy 5 warehouses for $778.3 million

Maybank thinks that MLT’s tenancy risk has risen partly from CWT leases growing 9.5% from 6.5% of its gross revenue. Despite this, Maybank noted that rapid e-commerce expansion, increasing supply chain efficiency will buoy end-user demand.

“MLT will further leverage its widening logistics provider network in direct leasing arrangements with remaining 30% of third-party end-users to drive occupancies and rentals,” Maybank KE said.

Besides the 5 warehouses, MLT has also secured a right of first refusal (ROFR) on CWT’s Mega Integrated Logistics Hub in Jalan Buroh subject to a prior ROFR to JTC. Located in three key western logistics clusters which is 20 minutes away from the city centre, said properties have accessibility to the upcoming Tuas Mega Port.