Brokers' take

Mapletree Logistics Trust | Buy July 24 close: S$1.60 Target price: S$1.85 DBS Group Research, July 24

Following the acquisition of 11 properties in China and a portfolio of five ramp-up properties in Singapore and divestments of selected older-specification properties, Mapletree Logistics Trust (MLT) saw a slight dip in occupancy rates to 97.6 per cent in Q1 FY2020 (Q4 FY2019 of 98.0 per cent). We saw higher take-rates from China (96.4 per cent in Q1 FY2020 versus 95.5 per cent in Q4 FY2019) from the backfilling of JD.com space. However, we saw a drop in occupancy rates in Singapore (96.5 per cent in Q1 FY2020 versus 97.4 per cent in Q4 FY2019) due to the expiry of a single-user asset for which the manager looks to backfill in the subsequent quarters.

The Reit also reported a strong rental reversion of 1.8 per cent in Q1 FY2020 (versus 2 per cent for FY2019) mainly from Hong Kong, Vietnam, and China. We think operating metrics remain resilient.