Mapletree Logistics Trust (MLT) FY25 Update: DPU Falls Amid Headwinds, BUY Rating Affirmed 1, 2

OCBC Investment Research Private Limited 24 April 2025
Mapletree Logistics Trust Faces Headwinds Despite Portfolio Resilience: FY25 Analysis and Outlook
Mapletree Logistics Trust (MLT) reported a challenging end to its fiscal year 2025, marked by declining distributions per unit (DPU) amid rising costs and foreign exchange pressures. However, the REIT maintains a resilient portfolio and a BUY rating from analysts.

Investment Thesis: Balancing Resilience and Near-Term Challenges

Mapletree Logistics Trust boasts a geographically diverse logistics portfolio spanning key Asian markets including Singapore, Hong Kong, Japan, Australia, Vietnam, China, and India. Backed by strong management execution and a successful capital recycling strategy that has returned net divestment gains to unitholders, MLT has historically shown resilience.
The trust is well-positioned to benefit from the structural shift towards e-commerce growth. Nevertheless, significant headwinds are expected to impact near-term growth prospects. These include rising borrowing costs, unfavourable foreign exchange fluctuations, and increasingly challenging operating conditions, particularly in China.

FY25 Financial Performance: A Soft Quarter Caps the Year

4QFY25 Results Overview MLT’s fourth quarter of the financial year ending March 2025 (4QFY25) saw its DPU decrease by 11.6% year-on-year (YoY) to 1.955 Singapore cents. This marked the third consecutive quarter of double-digit DPU decline. The results were broadly in line with expectations despite the softness.
Key financial metrics for 4QFY25:

• Gross Revenue: SGD 179.6 million (-0.8% YoY)
• Net Property Income (NPI): SGD 152.8 million (-1.6% YoY)
• Borrowing Costs: SGD 38.7 million (+4.0% YoY)

The weaker performance was primarily attributed to reduced contributions from China and significant FX headwinds, mainly from the Korean Won (KRW), Australian Dollar (AUD), and Japanese Yen (JPY). These negative impacts were partially offset by improved performances in Singapore, Australia, and Hong Kong.
Full Year FY25 Performance Cumulatively for FY25:

• NPI: SGD 625.3 million (-1.5% YoY)
• DPU: 8.053 Singapore cents (-10.6% YoY)

The full-year DPU result was close to the analyst forecast of 8.08 Singapore cents.
Financial Summary & Forecasts

Key Financial Ratios

Portfolio Operations: Occupancy and Rental Reversions

Overall Portfolio Health MLT’s overall portfolio occupancy experienced a slight dip of 0.1 percentage points quarter-on-quarter (QoQ), settling at 96.2%. Declines were noted in Vietnam, Malaysia, South Korea, and Singapore, but these were partly counterbalanced by occupancy gains in Japan and China. Notably, Australia and India maintained full 100% occupancy rates.
Portfolio rental reversions remained positive overall at +5.1% for the quarter. Excluding the challenging China market, reversions were stronger at +6.9%.
China Market Dynamics The drag from the China portfolio continued, although there were some encouraging signs. China’s occupancy rate increased for the second consecutive quarter. However, rents remained weak, with negative rental reversions of -9.4% registered. This was an improvement compared to the -10.2% negative reversion seen in 3QFY25. Management expects occupancy and rental reversions (projected at negative high single digits) in China to remain stable at current levels, assuming no significant deterioration in the economic backdrop.
Over 90% of MLT’s China portfolio revenue comes from tenants serving the domestic market, primarily related to e-commerce. Exposure to tenants exporting to the US is minimal, at a low single-digit percentage.
Other Regional Highlights Rental reversions were positive across all other regions where leases were signed during the quarter. Healthy uplifts were observed in:

• Japan: +15.7% (largely due to a specific lease contracted 20 years ago)
• Singapore: +7.0%
• South Korea: +4.7%

Tenant Base Focus Approximately 85% of MLT’s total portfolio revenue is derived from tenants focused on domestic consumption within their local markets. The remaining ~15% comes from tenants engaged in the export business, with only a small fraction of this group exporting to the United States.

Capital Management and Valuation Adjustments

Leverage and Debt Profile Following an independent portfolio valuation exercise, MLT recorded a net fair value loss of SGD 62.0 million. This was primarily attributed to properties in China, South Korea, and Singapore, partially offset by valuation gains in most other markets. Consequently, the aggregate leverage ratio increased slightly from 40.3% (as of 31 Dec 2024) to 40.7%.
MLT maintains a prudent debt management strategy, with 81% of its total debt hedged against interest rate movements. The overall cost of borrowing remained stable QoQ at 2.7% for the fifth consecutive quarter.
Forecast Revisions and Fair Value Update Analysts have lowered the FY26 DPU forecast by 4.2%. This adjustment reflects updated foreign exchange assumptions and the removal of distributions from divestment gains from the forecast. Furthermore, the cost of equity assumption used in the valuation model has been increased from 6.6% to 7.0%. This reflects increased market volatility and the potential negative impact from reciprocal tariffs on markets where MLT operates.
Following these adjustments, the fair value estimate for MLT has been reduced from SGD 1.61 to SGD 1.47. The stock maintains a BUY rating as of 24 April 2025, with a last closing price of SGD 1.21.

ESG Commitments and Updates

MLT’s ESG rating has been upgraded, largely due to improvements in its talent management practices. The trust now has a formal talent pipeline strategy and is considered on par with industry peers in this area. MLT is also recognized as a leader among peers in its green building initiatives.
Key ESG targets include:

• Achieving carbon neutrality for Scope 1 and 2 emissions by 2030.
• Aligning with the Mapletree Group’s long-term target of net zero emissions by 2050.
• Expanding self-funded solar energy generating capacity to 100 MWp by 2030.
• Achieving green certification for more than 80% of its portfolio by gross floor area (GFA) by 2030 (up from 45% as at 30 Sep 2024).

Investment Outlook: Catalysts and Risks

Potential Catalysts

• Stronger-than-expected increases in logistics rental rates.
• Acquisitions that are accretive to DPU.
• Distribution of gains from ongoing capital recycling activities (divestments).

Investment Risks

• Potential loss of income and downtime due to rental default by key tenants.
• Increases in borrowing costs resulting from spikes in interest rates.
• Exposure to foreign currency fluctuations given the portfolio’s presence in multiple countries.

Peer Valuation Comparison

The following table provides a valuation comparison with peer REITs based on estimated figures for FY26 and FY27:

Company Overview (as of 31 March 2025)

Mapletree Logistics Trust (MLT) was the first Asia-focused logistics REIT listed in Singapore, debuting on the SGX-ST main board on 28 July 2005. Its core strategy involves investing in a diversified portfolio of income-producing logistics real estate and related assets. As of 31 March 2025, MLT’s portfolio comprised 180 properties located across Singapore, Australia, China, Hong Kong SAR, India, Japan, Malaysia, South Korea, and Vietnam. The total assets under management (AUM) stood at SGD 13.3 billion. MLT is managed by Mapletree Logistics Trust Management Ltd., a wholly owned subsidiary of Mapletree Investments Pte Ltd. Temasek Holdings Pte. Ltd. is the top shareholder with a 33.0% stake.
FY25 Geographic Breakdown (Gross Revenue)

• Singapore: 27.7%
• Hong Kong: 17.0%
• China: 17.0%
• Japan: 11.3%
• South Korea: 7.9%
• Australia: 7.3%
• Malaysia: 6.2%
• Vietnam: 4.5%
• India: 1.1%

FY25 Geographic Breakdown (Net Property Income – NPI)

• Singapore: 27.5%
• Hong Kong: 18.6%
• China: 14.9%
• Japan: 11.0%
• Australia: 8.0%
• South Korea: 7.6%
• Malaysia: 6.3%
• Vietnam: 4.8%
• India: 1.2%

Historical Performance Trends

Occupancy Trend (FY End)

• FY2019: 98.0%
• FY2020: 98.0%
• FY2021: 97.5%
• FY2022: 96.7%
• FY2023: 97.0%
• FY2024: 96.0%
• FY2025: 96.2%

Distribution Per Unit (DPU) Trend (S cents)

• FY2019: 7.94
• FY2020: 8.14
• FY2021: 8.33
• FY2022: 8.79
• FY2023: 9.01
• FY2024: 9.00
• FY2025: 8.05

Detailed Company Financials

Income Statement Summary (SGD Millions)

Profitability Ratios (%)

Credit Ratios