SGX: M44U (Mapletree Logistics Trust)
📉 JP Morgan Flags Near-Term Risk for Mapletree Logistics Trust Amid Tariff Turmoil 📦
MLT shares seen pricing in mild downside, but worst-case scenario suggests 38% drop
JP Morgan (JPM) has warned that Mapletree Logistics Trust (MLT) could face near-term downside risks due to global trade disruptions, despite 86% of its portfolio being anchored in domestic consumption markets. The remaining 14% of MLT’s exposure is tied to export-driven demand.
At MLT’s closing price of $1.05 on April 9, JP Morgan believes the market has already priced in a 5% drop in rents and occupancy, based on a projected FY2026 DPU of 6.71 cents.
However, in a worst-case scenario—a 15% occupancy drop and 20% rental cut, similar to what’s occurred in China—DPU could fall to 4.26 cents, implying a 6.5% yield and a 38% downside from the current share price.
Despite the volatility, JP Morgan is maintaining its “overweight” rating on MLT, noting that the REIT still offers long-term value, especially if a resolution to the ongoing tariff war emerges.
SGX: BLIP (Elite UK REIT)
🇬🇧 Elite UK REIT Leverages Government Leases and Living Sector Expansion to Drive Growth 💷
Only UK-focused S-REIT on SGX bets on student housing, debt optimisation, and lease renewals for future value
Elite UK REIT, backed by sponsors Elite Partners Holdings, Ho Lee Group, and Sunway RE Capital, manages a GBP416 million ($717 million) portfolio of 148 UK properties. These assets are primarily freehold and virtual freehold properties, mostly tenanted to the UK Department for Work & Pensions (DWP) and used as JobCentres, offering resilient and government-backed rental income.
As the only UK REIT listed on SGX trading in GBP, Elite UK REIT provides a differentiated investment gateway into UK real estate, with natural currency hedging and stable income. Rental payments are made in advance, allowing efficient debt reduction and finance cost optimisation.
The REIT raised its distribution payout ratio to 95% in 2H2024 from 90%, supported by stronger portfolio valuation and improved financials. Management aims to maintain or increase this ratio going forward.
While most leases expire in 2028, early renewal talks with the DWP are underway. Additionally, Elite is expanding into the living sector, focusing on purpose-built student accommodation (PBSA) and built-to-rent (BTR) assets. Properties such as Lindsay House in Dundee are being explored for conversion into PBSA.
To mitigate interest rate risk, Elite UK REIT has hedged 86% of its debt and reduced borrowing costs to 4.9% as of Dec 31, 2024, saving GBP2 million annually. All loans are 100% sustainability-linked, enabling margin reductions tied to energy performance targets—all of which were met in FY2024.
Elite is also evaluating the monetisation of its Peel Park, Blackpool site, which saw a 35.5% y-o-y valuation increase and is progressing through approvals for a data centre development.
To enhance liquidity and visibility, the REIT is ramping up investor engagement and research coverage, with four brokerages initiating or restarting coverage in 2024. It will also seek unitholder approval for a unit buyback mandate at the April 30 AGM, signalling confidence in its valuation.
Looking ahead, Elite plans to accelerate lease renewals, reposition assets, and pursue accretive acquisitions, all while reducing gearing. With stable sovereign-backed income and a clear expansion strategy, the REIT aims to increase long-term value for unitholders.
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