Dissecting The Mapletree Brand REITs
Most investors in the market are familiar with the name Mapletree. After all, it is the sponsor of four different REITs that are listed on SGX with strong firepower. In the past 12 months, the Mapletree Group of REITs have been one of the more active S-REITs with acquisitions worth $3.1 billion made in Singapore, Hong Kong, China, Japan and the US. We dive into the Mapletree brand to see what makes its REITs so unique in the S-REIT space.
Investors Takeaway: Dissecting The Mapletree Brand REITs
Mapletree Logistics Trust
Mapletree Logistics Trust has been on an acquisition spree. It added $1.8 billion worth of new assets over the past 12 months. Moving forward, there are still plenty of inorganic growth opportunities for Mapletree Logistics Trust in China, Hong Kong, Japan and Australia.
The manager of Mapletree Logistics Trust has earmarked $200 million in potential divestments in the coming quarters as part of its asset recycling strategy. It is also planning for asset rejuvenation for older assets to maintain relevance to end-users.
BUY, TP $1.50; Current share price $1.22
Mapletree Industrial Trust
Mapletree Industrial Trust is fast emerging as a potential data centre play with its recent acquisition of data centre assets. The manager highlights that the REIT will look to grow its overseas data centre exposure to 20 percent of its assets, which is twice its current exposure. Mapletree Industrial Trust will also look to expand not just in US, but also in the EU and UK which the manager notes that there is a number of interesting acquisition opportunities.
Moving forward, the manager’s focus is to complement a steady organic growth profile through selective development opportunities or acquisitions. It will start with the full-year contribution from the Hewlett Packard building phase 2 and a recently completed built-to-suit (BTS) data centre in Singapore. It is also undertaking the refurbishment and conversion of 7 Tai Seng from a logistics facility into a high-specifications industrial property to accommodate a tenant in the ICT industry which has already signed a 25-year contract to give Mapletree Industrial Trust’s unit holders some income visibility.
BUY, TP $2.22; Current share price $1.97
Mapletree Commercial Trust
Despite ongoing challenges in the retail sector, VivoCity is helping Mapletree Commercial Trust to hold its weight in the retail sector. VivoCity is still a top location for both retailers and shoppers, where a majority of retailers will like to maintain a presence. With VivoCity having undergone a recent asset-enhancement initiative, Mapletree Commercial Trust should expect return on investment to increase in the coming quarters.
Despite having an attractive pipeline of potential assets waiting to be injected, Mapletree Commercial Trust intends to remain a Singapore-focused REIT. This makes it one of the eight REITs left in Singapore with such a “pure-play status”. According to DBS, the clarity in earnings and strategy to investors might translate to a premium in terms of valuation for Mapletree Commercial Trust unitholders.
BUY, TP $1.80; Current share price $1.58
Mapletree North Asia Commercial Trust
Mapletree North Asia Commercial Trust is the proud owner of one of the top performing retail malls in Hong Kong, i.e. Festive Walk. Rental reversions at Festival Walk are expected to accelerate in FY19 with tenant sales riding on the recent strength in retail sales in Hong Kong. The expiry of several anchor tenants through the year will give Mapletree North Asia Commercial Trust the opportunity to adjust rental rates.
Mapletree North Asia Commercial Trust recently acquired a portfolio of commercial properties in Japan. DBS thinks that these properties will be value accretive to the REIT, boosting income stability by lengthening the portfolio weighted average lease expiry (WALE) and diversifying its earnings base. The expansion into Japan also gives Mapletree North Asia Commercial Trust more opportunities to grow inorganically.
BUY, TP $1.45; Current share price $1.13
