CGS International Securities Singapore Pte. Ltd. April 24, 2025
Mapletree Logistics Trust: Portfolio Diversity Drives Reversion Resilience Amid Challenges
Mapletree Logistics Trust (MLT) demonstrates resilience, leveraging its diverse portfolio to navigate market headwinds, particularly in China. While facing some pressure, the trust’s performance remains largely in line with expectations, supported by positive rental reversions in key markets and prudent capital management.
FY2025 Financial Performance Overview
MLT reported results largely consistent with forecasts for the fourth quarter and full year ending March 2025.
4QFY25 Highlights
- Distribution Per Unit (DPU): 1.955 Singapore cents, representing 24.4% of the full-year forecast (FY25F). This marks a 10.3% year-on-year (yoy) decrease and an 11.6% yoy drop compared to 4QFY24’s 2.211 Scts.
- Revenue: S\$179.6 million, a slight decrease of 0.8% yoy.
- Net Property Income (NPI): S\$152.8 million, down 1.6% yoy.
- Distribution Income: S\$99.1 million, down 10.3% yoy.
The yoy decline in NPI and DPU was attributed to lower contributions from China, income gaps from divested properties, and adverse foreign exchange movements. These were partially offset by stronger performance in Singapore, Australia, and Hong Kong (China). Slightly higher borrowing costs and reduced distribution of divestment gains also contributed to the lower DPU.
Full Year FY3/25 Highlights
- DPU: 8.053 Singapore cents, achieving 100.6% of the FY25F forecast. This was a 10.6% decrease compared to FY24’s 9.003 Scts.
- Revenue: S\$727.0 million, down 0.9% yoy from S\$733.9 million.
- NPI: S\$625.3 million, down 1.5% yoy from S\$634.9 million.
- Distribution Income: S\$406.4 million, a 9.1% decrease from S\$447.1 million in FY24.
Year-end valuations showed net fair value losses for properties in China, South Korea, and Singapore, counterbalanced by gains in other markets.
Results Comparison Table
| FYE Mar (S\$ m) |
4QFY25 |
4QFY24 |
yoy % chg |
qoq % chg |
Cum FY25 |
Cum FY24 |
yoy % chg |
Our FY25F |
Comments |
| Revenue |
179.6 |
181.0 |
(0.8) |
(1.5) |
727.0 |
733.9 |
(0.9) |
736.7 |
In line. 4Q/FY3/25: 24.4%/98.7% of our FY25F forecast |
| Property operating expenses |
(26.8) |
(25.7) |
4.5 |
6.3 |
(101.7) |
(98.9) |
2.8 |
(98.8) |
|
| NPI |
152.8 |
155.3 |
(1.6) |
(2.8) |
625.3 |
634.9 |
(1.5) |
637.8 |
In line. 4Q/FY3/25: 24%/98% of our FY25F forecast |
| NPI margin (%) |
85.1 |
85.8 |
|
|
86.0 |
86.5 |
|
86.6 |
|
| Interest expense |
(38.7) |
(37.2) |
4.0 |
(3.1) |
(156.9) |
(145.9) |
7.5 |
(154.8) |
|
| Interest & invt inc |
0.6 |
0.7 |
(18.0) |
(17.4) |
2.6 |
2.9 |
(9.8) |
2.3 |
|
| Manager & trustee fees |
(22.8) |
(23.0) |
(1.0) |
(2.2) |
(92.3) |
(93.0) |
(0.7) |
(92.8) |
|
| Net profit |
(31.5) |
57.8 |
(154.6) |
(138.3) |
183.5 |
303.1 |
(39.5) |
346.2 |
|
| Distr profit |
99.1 |
110.4 |
(10.3) |
(2.2) |
406.4 |
447.1 |
(9.1) |
401.2 |
In line. 4Q/FY3/25: 24.7%/101.3% of our FY25F forecast |
| DPU (S cts) |
1.955 |
2.211 |
(11.6) |
(2.4) |
8.053 |
9.003 |
(10.6) |
8.01 |
In line. 4Q/FY3/25: 24.4%/100.6% of our FY25F forecast |
Portfolio Performance and Leasing Activity
MLT’s portfolio metrics showed mixed results in the final quarter of FY25.
Occupancy and Redevelopment
Portfolio occupancy saw a marginal dip of 0.1 percentage points quarter-on-quarter (qoq) to 96.2%. This was due to lower take-up rates in Singapore, Japan, South Korea, Vietnam, and Malaysia.
Encouragingly, the redevelopment project at 5A Joo Koon Circle in Singapore has achieved a pre-commitment rate of 46%, a significant jump from 11% in the previous quarter. An additional 30% is under active negotiation, positioning the asset well ahead of its scheduled completion in May 2025.
Rental Reversions
Overall portfolio rental reversion stood at a positive 5.1% in 4QFY25. Excluding China, the reversion rate was even stronger at +6.9%. Positive reversions were recorded across several markets:
- Japan: +15.7%
- Hong Kong SAR: +1.3%
- Other markets also showed positive trends.
However, China continued to experience negative rental reversions at -9.4% compared to previous levels. While still negative, the downward pressure showed signs of slowing compared to the previous quarter.
Lease Expiry Profile
Looking ahead, MLT faces significant lease renewals:
- FY26F: 32.3% of leases due for re-contracting
- FY27F: 21.9% of leases due for re-contracting
A key point of attention is that approximately 50% of the lease expiries in FY26F originate from China. The ongoing negative reversions in this market could potentially weigh on the overall portfolio rental reversion performance in the upcoming fiscal year.
Capital Management and Financial Flexibility
MLT maintained a stable financial position while preparing for market uncertainties.
Gearing and Interest Costs
- Gearing: Stood at 40.7% at the end of 4QFY25, inching up slightly but remaining within prudent levels.
- Interest Cost: Remained stable qoq at 2.7%.
- Hedging: Approximately 81% of MLT’s debt is hedged into fixed rates, mitigating interest rate volatility. Furthermore, 75% of distributable income is hedged into Singapore Dollars (S\$) for the next 12 months, reducing foreign exchange risk.
Divestment Gains and Portfolio Resilience
As part of its cautious capital management strategy, MLT intends to retain divestment gains. This approach aims to build financial flexibility amidst current uncertain market conditions.
MLT highlighted the resilience of its tenant base. Approximately 85% of its revenue comes from tenants serving domestic consumption needs. Only the remaining 15% are involved in the export business, suggesting a degree of insulation from global trade fluctuations.
Outlook, Forecast Adjustments, and Investment Recommendation
Analysts have slightly adjusted forecasts based on a moderated growth outlook.
DPU Forecasts and Target Price
- FY26F DPU estimate lowered by 1.09% to 7.48 Scts.
- FY27F DPU estimate lowered by 1.98% to 7.423 Scts.
These adjustments reflect expectations of a slower growth trajectory. Consequently, the DDM-based Target Price (TP) has been revised downwards from S\$1.73 to S\$1.63. The cost of equity assumption remains unchanged at 7.83%.
Key Earnings Revisions
| FYE Mar (S\$m) |
Previous |
New |
% chg |
|
FY26F |
FY27F |
FY26F |
FY27F |
FY26F |
FY27F |
| Gross revenue |
745.2 |
749.6 |
738.8 |
742.4 |
-0.86% |
-0.96% |
| Distribution income |
382.0 |
383.1 |
380.3 |
380.7 |
-0.45% |
-0.62% |
| DPU (Scts) |
7.56 |
7.57 |
7.48 |
7.423 |
-1.09% |
-1.98% |
Investment Thesis: Maintain Add Rating
Despite the lowered TP and DPU forecasts, the ‘Add’ rating for MLT is reiterated. The projected FY26F DPU yield of 6.4% (based on the current price of S\$1.16) is believed to have largely factored in the anticipated slower growth. The target price of S\$1.63 suggests a potential upside of 40.7%.
Potential Catalysts
- Sustained leasing momentum coupled with positive rental renewals.
- Acceleration of asset recycling activities (divestments and acquisitions).
Downside Risks
- A soft macroeconomic outlook could dampen rental growth prospects.
- Adverse impacts on portfolio valuations from economic weakness.
- Deterioration in the rental reversion outlook, particularly in key markets like China.
ESG Performance Snapshot
Mapletree Logistics Trust received an overall ESG score of ‘B’ from LSEG for FY3/23.
- Pillar Scores: Environmental (B+), Social (B), Governance (B+).
- Controversies Score: A+ (indicating minimal controversies).
MLT launched a green roadmap in its FY3/24 annual report, targeting carbon neutrality for Scope 1 and 2 emissions by 2030 and net zero by 2050. Key 2030 goals include:
- Green certification for >80% of its portfolio.
- 20% reduction in energy intensity (Singapore & HK SAR) from FY3/19 baseline.
- Expansion of solar energy capacity to 100 MWp.
As of December 2024, green/sustainability-linked loans stood at S\$1.2bn (c.21.6% of total debt). Notable FY25 initiatives include increasing green certified space to 45% of portfolio GFA (as of Sep 2024) and growing total solar capacity to 69.1MWp (as of Dec 2024). While scoring well in many areas (Workforce: A, Product Responsibility: A, Management: A), areas like Environmental Innovation (D+), Community (D-), and Shareholders (C+) show room for improvement. The report notes no premium/discount has been applied for ESG in the valuation.
Financial Summary and Key Ratios
Financial Summary
| (S\$m) |
Mar-24A |
Mar-25A |
Mar-26F |
Mar-27F |
Mar-28F |
| Gross Property Revenue |
733.9 |
727.0 |
738.8 |
742.4 |
747.4 |
| Net Property Income |
634.9 |
625.3 |
634.6 |
637.9 |
642.4 |
| Net Profit |
303.1 |
183.5 |
315.4 |
315.7 |
317.4 |
| Distributable Profit |
447.1 |
406.4 |
380.3 |
380.7 |
382.6 |
| Core EPS (S\$) |
0.058 |
0.051 |
0.060 |
0.060 |
0.060 |
| DPS (S\$) |
0.090 |
0.081 |
0.075 |
0.074 |
0.074 |
| Dividend Yield |
7.76% |
6.94% |
6.44% |
6.40% |
6.38% |
| Asset Leverage |
38.4% |
40.2% |
40.4% |
40.8% |
41.4% |
| BVPS (S\$) |
1.38 |
1.31 |
1.29 |
1.26 |
1.24 |
| P/BV (x) |
0.84 |
0.89 |
0.90 |
0.92 |
0.93 |
Key Ratios
|
Mar-24A |
Mar-25A |
Mar-26F |
Mar-27F |
Mar-28F |
| NPI Growth |
0.03% |
(1.52%) |
1.49% |
0.52% |
0.70% |
| Net Property Income Margin |
86.5% |
86.0% |
85.9% |
85.9% |
85.9% |
| DPS Growth |
(0.1%) |
(10.6%) |
(7.2%) |
(0.7%) |
(0.3%) |
| Gross Interest Cover |
3.52 |
3.33 |
3.28 |
3.29 |
3.27 |
| Asset Leverage |
38.4% |
40.2% |
40.4% |
40.8% |
41.4% |
Peer Comparison: Singapore REITs (SREITs)
The following table provides a comparison of MLT with its peers across various SREIT sectors based on data as of April 24, 2025. (Note: NR = Not Rated, forecasts for NR companies based on Bloomberg consensus).
| Sector/Company |
Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage (%) |
P/NAV (x) |
Div Yield FY25F (%) |
Div Yield FY26F (%) |
Div Yield FY27F (%) |
| Hospitality |
| CapitaLand Ascott Trust |
CLAS SP |
Add |
0.84 |
1.13 |
\$2,440 |
38.3% |
0.73 |
7.3% |
7.5% |
7.6% |
| CDL Hospitality Trust |
CDREIT SP |
Add |
0.80 |
1.07 |
\$771 |
38.8% |
0.54 |
7.3% |
7.9% |
8.1% |
| Far East Hospitality Trust |
FEHT SP |
Add |
0.56 |
0.75 |
\$853 |
30.8% |
0.60 |
7.3% |
7.1% |
7.1% |
| Frasers Hospitality Trust |
FHT SP |
NR |
0.61 |
NA |
\$773 |
35.0% |
0.95 |
4.1% |
4.4% |
4.8% |
| Industrial |
| AIMS AMP |
AAREIT SP |
NR |
1.25 |
NA |
\$754 |
33.7% |
0.99 |
7.4% |
7.3% |
7.5% |
| CapitaLand Ascendas REIT |
CLAR SP |
Add |
2.66 |
3.10 |
\$8,922 |
37.7% |
1.21 |
5.8% |
6.0% |
6.1% |
| ESR-REIT |
EREIT SP |
Add |
0.21 |
0.36 |
\$1,283 |
42.8% |
0.76 |
10.3% |
10.8% |
10.9% |
| Frasers Logistics & Commercial Trust |
FLT SP |
Add |
0.90 |
1.35 |
\$2,581 |
36.2% |
0.80 |
7.4% |
7.6% |
7.4% |
| Keppel DC REIT |
KDCREIT SP |
Add |
2.07 |
2.48 |
\$3,559 |
30.2% |
1.35 |
4.8% |
5.0% |
5.2% |
| Mapletree Industrial Trust |
MINT SP |
Add |
2.05 |
2.82 |
\$4,455 |
39.8% |
1.18 |
6.8% |
6.9% |
7.1% |
| Mapletree Logistics Trust |
MLT SP |
Add |
1.16 |
1.63 |
\$4,480 |
40.7% |
0.89 |
6.9% |
6.4% |
6.4% |
| Stoneweg European REIT |
SERT SP |
Add |
1.43 |
1.92 |
\$913 |
40.2% |
1.08 |
9.0% |
9.1% |
9.0% |
| Sabana Shariah |
SSREIT SP |
NR |
0.36 |
NA |
\$291 |
37.4% |
0.72 |
0.0% |
0.0% |
0.0% |
| Office |
| Keppel REIT |
KREIT SP |
Add |
0.85 |
1.08 |
\$2,493 |
42.1% |
0.68 |
6.4% |
6.8% |
6.9% |
| OUE REIT |
OUEREIT SP |
Hold |
0.28 |
0.32 |
\$1,153 |
39.3% |
0.47 |
7.1% |
7.4% |
7.7% |
| Suntec REIT |
SUN SP |
Hold |
1.16 |
1.33 |
\$2,594 |
42.3% |
0.57 |
5.5% |
5.9% |
6.2% |
| Retail |
| CapitaLand Integrated Commercial |
CICT SP |
Add |
2.14 |
2.45 |
\$11,930 |
38.5% |
1.02 |
5.2% |
5.5% |
5.7% |
| Frasers Centrepoint Trust |
FCT SP |
Add |
2.28 |
2.68 |
\$3,343 |
39.3% |
1.02 |
5.3% |
5.4% |
5.5% |
| Lendlease Global Commercial REIT |
LREIT SP |
Add |
0.52 |
0.69 |
\$960 |
40.8% |
0.70 |
7.7% |
7.7% |
7.8% |
| Mapletree Pan Asia Commercial Trust |
MPACT SP |
Add |
1.22 |
1.53 |
\$4,898 |
38.2% |
0.71 |
6.7% |
6.8% |
7.0% |
| Paragon REIT |
PGNREIT SP |
Hold |
0.98 |
0.98 |
\$2,110 |
35.3% |
1.07 |
5.2% |
5.4% |
5.6% |
| Starhill Global REIT |
SGREIT SP |
Add |
0.49 |
0.60 |
\$857 |
36.2% |
0.71 |
7.4% |
7.5% |
7.6% |
| Overseas-centric |
| CapitaLand China Trust |
CLCT SP |
NR |
0.69 |
NA |
\$916 |
41.9% |
0.63 |
8.4% |
8.5% |
8.6% |
| Elite UK REIT |
ELITE SP |
Add |
0.29 |
0.35 |
\$227 |
45.5% |
0.74 |
10.1% |
10.1% |
10.2% |
| Manulife US REIT |
MUST SP |
Add |
0.07 |
0.13 |
\$115 |
60.8% |
0.28 |
0.0% |
42.4% |
49.2% |
| Sasseur REIT |
SASSR SP |
Add |
0.63 |
0.85 |
\$598 |
24.8% |
0.75 |
9.9% |
10.2% |
10.5% |
| Healthcare |
| Parkway Life REIT |
PREIT SP |
Add |
4.18 |
4.91 |
\$2,078 |
36.1% |
1.73 |
3.7% |
4.0% |
4.2% |
*Note: Last stated NAV, P/NAV based on last reported figures. Leverage based on last reported asset leverage.*
Analyst Certification and Disclosures
The analysts responsible for this report certify that the views expressed accurately reflect their personal views about the issuers and securities analyzed, and their compensation is not directly related to specific recommendations or views.
CGS International discloses that as of April 16, 2025, it has a proprietary position in the securities of Mapletree Logistics Trust. The analysts involved in preparing this report did not hold any interest in MLT securities as of April 24, 2025.
Recommendation Framework
- Add: Total return expected to exceed 10% over the next 12 months.
- Hold: Total return expected to be between 0% and 10% over the next 12 months.
- Reduce: Total return expected to fall below 0% over the next 12 months.
Total expected return includes potential price appreciation (difference between target price and current price) and forward net dividend yields over a 12-month horizon.
