MAPLETREE LOGISTICS TRUST

MAPLETREE LOGISTICS TRUST | BUY

OCT 9 CLOSE: $1.22

TARGET PRICE: $1.37

OCBC Investment Research, Oct 9

Having proposed to acquire a portfolio of five modern ramp-up logistics properties in Singapore from CWT Pte Ltd in early July, Mapletree Logistics Trust (MLT) has now completed the acquisition on Sept 28 following the relevant approvals and a successful private placement exercise.

The acquisition of this portfolio is expected to contribute an initial net property income yield of 6.2 per cent. CWT will become MLT's top tenant, providing about 9.5 per cent of its gross revenue.

Factoring the above-mentioned transactions in our model, we raise our fair value estimate from $1.34 to $1.37.

MLT's sponsor, Mapletree Investments, has been active in expanding its global logistics footprint.

On Oct 3, it announced the acquisition of a portfolio of logistics properties in the US (such as Chicago, Dallas and Seattle) and Europe (such as Paris and Warsaw) from Prologis, Inc, for US$1.1 billion.

While this provides MLT with a potential acquisition pipeline, we believe its focus over the near term will remain on the Asia-Pacific region.

Thereafter, management would likely be open to exploring opportunities in new markets, in our view, but would evaluate all potential transactions prudently.

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