Are Mapletree Logistics Trust shares worth buying now?

The logistics real estate investment trust (REIT) is close to completing a takeover of Yeoju Logistics Centre in South Korea.

  • Mapletree Logistics Trust (SGX: M44U) share price hits S$2 on Thursday (21 October)
  • The REIT’s stocks are down by nearly 5% in the last one month
  • It proposed an acquisition of a South Korean logistics property for S$153.8 million
  • Keen to trade Mapletree Logistics Trust shares? Open an account with us to long or short the stock now.

MLT to acquire South Korean property for S$154m

Mapletree Logistics Trust Management Ltd., the manager of Mapletree Logistics Trust (MLT), announced the proposed acquisition of Yeoju Logistics Centre in South Korea for 135 billion Korean won (S$153.8 million).

The property was independently valued by MatePlus Appraisal at 139.6 billion won as at 2 September 2021 based on the Market Comparison and Discounted Cash Flow methods.

Transaction-related costs are estimated to be approximately 8.6 billion won (S$9.8 million), including stamp duty, professional advisory fees and the acquisition fee payable to the manager of 1.35 billion won (around S$1.5 million), being 1% of the purchase price.

The acquisition is estimated to generate a net property income yield of 4.2% based on the property purchase price and is expected to be accretive to MLT’s distribution per unit.

Assuming the acquisition is 100% debt funded, MLT’s aggregate gearing ratio will be approximately 40.3%. The acquisition is expected to be completed by the fourth calendar quarter of 2021, subject to fulfilment of relevant conditions precedent.

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Upon completion, MLT’s total portfolio will comprise 167 properties with assets under management of S$11.1 billion.

Spanning over 70,400 square metres (sqm) in total gross floor area on approximately 56,200 sqm of freehold land, the property features two blocks of three-storey dry warehouses that were completed in 2019.

Ms Ng Kiat, Chief Executive Officer of the Manager, said: ‘The pandemic has accelerated e-commerce growth and the demand for modern logistics space. With its high specifications and strategic location, this two year-old facility will position us well to capture the market growth.’

What’s the outlook for MLT stocks?

MLT shares closed slightly lower on Thursday, following the announcement.

The REIT’s stocks are down by 5% in the last one month, and even on a year-to-date basis.

Looking ahead, MLT shares have a consensus rating of ‘outperform’ and average target price of S$2.18, based on the latest analyst data published by SGX StockFacts.

Maybank analysts have a ‘buy’ call on MLT with a target price of S$2.35, while UOB and CIMB analysts are more pessimistic, rating the stock a ‘hold’ alongside lower target prices of S$2.08 and S$2.10 respectively.

Feeling bullish or bearish about MLT shares?

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