Brokers' take

Mapletree Logistics Trust | Hold

May 26 close: S$1.195

Target price: S$1.29

DBS Group Research, May 26

MAPLETREE Logistics Trust (MLT) announced the proposed acquisition of two warehouses, Mapletree Logistics Bac Ninh Phase 1 in Vietnam from its sponsor, and Dakonet Logistics Center in South Korea from a third party vendor.

At an estimated net property income yield of 10 per cent and 8 per cent for the Vietnam and Korean properties respectively, these acquisitions will somewhat compensate for the dip in earnings from Singapore over FY16-17 forecast (where expected property conversions from single-user to multi-tenanted properties are ongoing). While high yields are reflective of the high risk-premium associated with the overseas exposure, we are comfortable given the sponsor's enlarged presence in Vietnam and MLT's previous positive experiences from its previous deals in South Korea. Moreover, we see good income and cred…