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.

Read more: Beginner’s guide to day trading

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?

Go long or short with CFDs on MLT and 16,000+ shares with our award-winning platform.* Perfect your technique with S$200,000 worth of virtual funds if you sign up for a free demo account today.

*Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2020. Awarded the best retail FX provider for Asia by FX Markets in 2020

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.