Mapletree Logistics Trust Is Trading At Historical Low Dividend Yield
Key Highlights:
Mapletree Logistics Trust's (SGX:M44U) 2Q19 DPU grew 3.4%
The annualised yield and price to book ratio are 4.9% and 1.42 respectively
1. Dividends
Net property income and distribution per unit grew 21% and 3.4% to $121.8m and 2.025 cents, respectively. The increase was mainly due to
Completion of Ouluo Logistics Park Phase 1 redevelopment
Lower land rent and property expenses after the divestment of five properties in Japan
The annualised yield is 4.9%. It is currently trading at historical low yield.
2. Portfolio
Portfolio occupancy remains stable at 97.5%. While the REIT enjoyed positive rental reversion of 1.8% during the last quarter, 11.3% of its gross income will be up for renewal in 2020.
Portfolio leverage went up slightly to 37%. The interest cost is 2.6%, 83% of the loans are on fixed rates and only 2% due for refinancing next year. Besides, the REIT also reckons the risk of currency fluctuation, and it has hedged 80% of its distributable income to SGD.
It is currently trading at a price to book ratio of 1.42.
3. Growth catalyst
The management will continue to focus on asset management initiatives and potential yield accretive acquisitions. The REIT has recently announced the acquisition deal on seven logistics properties with a value of $422m from its sponsor. The estimated yield of the properties is 6.1%, which will increase the DPU by 1%.
Summary
With a portfolio focus in Singapore and Hong Kong, there would be some challenges on rental renewals as the economy starts to slow down. The fundamentals of the REIT remains strong, but we think that the price is slightly high at the moment.
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