• 9MFY25 DPU of 6.098 Scts (-10.2% y/y), remains in line with expectations
• Financial position resilient; active debt management keeps overall interest costs stable (vs rising for peers)
• Operations steady; uptick in reversions to 3.4% in 3QFY25; but China (C.20% of revenues) continues to remain weak and a key market to watch
• Active asset recycling strategies to optimise portfolio returns   
• BUY, TP SGD1.75 maintained  

What has happened

(+/-) DPUs of 6.098 Scts (-10.2% y/y), in line with estimates. Mapletree Logistics Trust (“MLT”) reported 9MFY25 results in line with expectations. DPU as of 9MFY25 came in at 6.098 Scts (-10.2% y/y), tracking 75% of our estimates. For the quarter, 3QFY25 DPU of 2.003 Scts (-11.1% y/y and -1.2% q/q), which reflects the combination of higher interest costs and lower divestments gains paid out in the quarter. Overall revenues and net property income came in 1.0% lower y/y in 9MFY25 at SGD 547.4mn and -1.5% lower y/y at SGD 472.5mn. This is mainly due to lower contribution from China and ongoing divestment activity, compounded by the weak currency translations (JPY, KRW, CNY and VND), which were partially offset by improved performance in Singapore, Australia and Hong Kong. Margins were marginally lower at 86% vs 87% mainly due to higher utilities and property related taxes. Stripping of the impact of currency, revenues and net property income would have increased by 0.8% and 0.3% y/y.  

 Our view

MLT share prices have dipped by c.12-15% from the average prices it traded at back in 2024, which we attribute to investors keeping a close eye on the REIT’s exposure in China (c.20% of revenues) which is seeing near term operational challenges that will remain a drag on its overall DPU returns. That said, we believe that its diversified exposure where its developed markets exposures in SG, JP, AU and Asia Pacific (ex China) outlook remain robust with the logistics markets remaining in a landlord’s market. Overall, we remain attracted by its valuations at c.1.0x P/B and a FY25F-26F yield of c.6.3%. In the event of a global slowdown, we expect increased positioning into sectors that can weather through economic downshifts and MLT remains well placed to deliver attractive total returns at current levels. BUY, TP SGD1.75. 

(+) Financial metrics stable despite rise in global rates. 

MAS leverage ratio remained stable at 40.3% (flat q/q), with (debt + perpetual) / asset ratio stable at 44.5%, as the manager took on additional loans to fund ongoing asset enhancement initiatives. We note that these ranges are well within management comfortable levels. Overall interest cost remained resilient at 2.7% (flat q/q, +0.2% y/y) despite the overall increase in interest rates, which was mainly due to the active management of their debt currency exposures. Looking ahead, management expects that overall cost of debt to still rise, albeit marginally as hedges roll off through 2025 but still remain within 3.0% (within our projections). As such, interest coverage ratio (“ICR”) remains stable and comfortable at 2.9x (vs 3.0x) and adjusted ICR ratio (accounting for perpetual securities distributions) is at c.2.9x, flat q/q. 

 (+) Operating metrics steady despite China negative reversions.   

We noticed that management continue to run a tight ship with a 0.3% q/q improvement in occupancy levels to 96.3% coming from Singapore (96.3%, +0.4% q/q) and South Korea (96.9%, +0.5% q/q) and China (93.5%, +0.2% q/q). We note a slight uptick in overall rental reversionary trends with portfolio reversions up +3.4%. Reversions were generally positive throughout its portfolio with notable increases in Singapore (+7.5%), Australia (+27.9%), HK (+2.5%) , South Korea (+3.7%), Malaysia (+2.6%). China remains negative at -10.2% given the managers’ retention strategy. Overall rental reversions, ex China, remains robust at +5.4%, which highlights the REIT’s robust operating outlook within the Asia Pacific region.  

 (+) Active asset and capital management the key to success 

MLT continues to diversify its earnings base through active acquisitions albeit at a more moderate pace with close to SGD 230mn worth of acquisitions in Malaysia and Vietnam and close to SGD 380mn worth of ongoing developments – in Benoi a 887,000 sqft modern logistics warehouse which will start contribute meaningfully to earnings in the coming year. The manager is also looking to redevelop its existing property in Malaysia for SGD MYR 536mn (completion in 1H28). 




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