Bookmark & Share
OCBC Research maintained its ‘Hold’ rating on Mapletree Logistics Trust (MLT) following the Reit’s announcement that it will divest its freehold properties in Japan.
In June, MLT unveiled plans to divest two of its freehold properties in Japan – Zama Centre and Shiroishi Centre – for JPY13.5 billion (S$164 million).
“MLT expects to recognise an estimated divestment gain of around JPY234 million (about S$2.9 million) over the original purchase cost after providing for taxes and transaction related expenses,” said OCBC.
Aside from the divestment, MLT also acquired 10 properties, eight of which are located in Australia, one in Malaysia and one in Vietnam, for around S$313 million.
The trust has also been rejuvenating its portfolio via asset enhancement initiatives and redevelopment projects to raise the specifications as well as attractiveness of its assets to unlock value for unitholders.
“Another proactive approach taken by MLT is the management of its single-user asset (SUA) leases, which account for only 2.9 percent of its lease expiries (by NLA) in FY2018. This would mitigate the risks if the SUA leases were converted to multi-tenanted buildings.”
In maintaining its ‘Hold’ rating, OCBC factored in MLT’s Japan divestments in its model and “assume that net proceeds would be largely used to pare down its existing debt”.
“We also increase our occupancy assumptions for some of MLT’s properties,” it added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
Related Articles:
JTC launches last 2 industrial sites at Tuas South Link
Two major consortium vying for GLP
Frasers Centrepoint buys 76.5% stake in German warehouse landlord