September 11, 2019

We hosted all four Mapletree REITs at a tailored conference in Bangkok. While investors were concerned on the impact of the trade war on operations and risk on distributions, we believe Mapletree REITs are well positioned in the near term, boosted by properties in more resilient asset classes coupled with acquisition prospects to drive 2-3% DPU growth in FY19-21F.

Mapletree Industrial Trust (MINT) – The perception of weaker financials of MINT’s largely small-medium enterprise (SMEs) base at its flatted factories is likely unfounded given the Manager’s active asset management strategy. In addition, ongoing conversion of its assets into higher specification properties coupled with selectively adding more overseas data centers offers earnings resilience and visibility. Buy. Target Price S$2.40. Share price closed at: S$2.29

Mapletree Logistics Trust (MLT) – We remain excited on MLT’s ability to ride the robust outlook for logistics properties in China and ASEAN. While it continues to enjoy a significant acquisition pipeline for growth, we believe that organic reversions will dial up in 2H20-21 as demand picks up in selected cities in China, Vietnam, Malaysia, and Singapore. There is earnings upside risk from acquisitions, and we have priced in S$500m in our forecast. Buy. Target Price S$2.50. Share price closed at: S$1.58.

Mapletree Commercial Trust (MCT) – We had not anticipated the meteoric  11% rise in share price in the past month ahead of its recently announced inclusion into the Straits Times Index (STI). We believe there is still upside from the current level with catalysts from (i) potential accretive purchase of Mapletree Business City Phase 2, and (ii) better than projected reversions and tenant sales at VivoCity post operations from a new anchor tenant. Buy. Target Price $1.85. Share price closed at: S$2.18.

Mapletree North Asia Commercial Trust (MNACT) –  Unlike its peers with malls that cater largely to tourists, MAGIC’s positioning is more towards mid-level brands coupled with a more local focused shopper profile, which underpins its more resilient outlook. MAGIC derives a significant portion of its revenues from Festival Walk in Hong Kong, a ‘family-themed mall’. We estimate the impact of a slowdown in tenant sales will be <2% of topline, which is manageable. Buy. Target Price S$1.65. Share price closed at: S$1.31