Brokers' take

Mapletree Industrial Trust | HOLD (maintained) Jan 17 close: S$1.99 Target price: S$2.04 OCBC Investment Research, Jan 17

MAPLETREE Industrial Trust (MIT) recently announced its proposed acquisition of 18 Tai Seng from its sponsor for an agreed property value of S$268.3 million. This is a high specification mixed-use development that is expected to generate a healthy initial net property income yield of about 6.8 per cent. Management intends to make this transaction distribution per unit (DPU) and net asset value (NAV) accretive.

We assume full debt funding at this juncture, and raise our FY20 DPU forecast by 2.4 per cent (FY19 unchanged). Consequently, our fair value moves from S$2.01 to S$2.04. Other recent developments for MIT include the signing of a long lease agreement with Equinix at its 7 Tai Seng Drive property, and subsequently upgrading it to a data centre.