Mapletree Logistics Trust DPU falls by 10.6%: Our Quick Take

Summary of Mapletree Logistics Trust 2Q FY24/25 results

Mapletree Logistics Trust provided an operational update for 2Q FY24/25. 

• 2Q25 DPU was 2.027 cents, 2.0% lower than 1Q25, and down 10.6% from 2Q24. 
• This translates into FY25 annualized yield of 5.8%.

2Q25 net property income grew 1.2% over 1Q25, but fell 2.1% year-on-year. NPI yield marginally improved to 4.8% (1Q25: 4.7%).

The positives were strong rental reversion in Singapore (+12.5%) and contributions from acquisitions in Malaysia and Vietnam. These were, however, eclipsed by negative rental reversion in China (-12.2%), absence of contributions from divested assets, and weaker JPY, KRW and VND. 

Notwithstanding the strong reversions in Singapore, portfolio rental reversion was -0.6% in 2Q25, down from +2.6% in 1Q25. Excluding China, it would be +3.6% (1Q25: +4.6%). Across its markets, rental growth in Japan and Hong Kong were considerably lower than 1Q25.

Management believes that rental reversion in Singapore should taper off to high single-digit. Rental reversions in China could remain at similar level, as 10% of China leases up for renewal in the next 12 months are not yet marked to market. China accounts for 18.4% of assets and 15.7% of 1H24 net property income.

Portfolio occupancy improved to 96.0%, with more spaces being filled in Hong Kong, Vietnam and South Korea. China occupancy maintains at 93.1%, with a high tenant retention rate of 70-80%. 

Year-to-date, it has divested 8 assets worth S$131m. This is part of the divestment pipeline of S$300m for this year. The proceeds have been deployed for acquisitions and asset enhancement work (AEI). 

To-date, it had acquired three properties worth S$228m at NPI yield of 5.7% to 7.5%. It has also committed S$205m for asset enhancement work (AEI) at 51 Benoi Road, which will complete in May/June 2025. Another AEI is planned in Malaysia for S$173m. 

Gearing inched higher to 40.2% (1Q25: 39.6%), due to lower asset value. 2Q25 finance cost rose 8.2% year on year to S$39.8m. Management believes divestment proceeds could bring down debt, and sees no need for equity fund raising (EFR) in FY25.

Cost of debt was unchanged at 2.7%. Management expects this to trend higher to 2.8% by end FY25 and 3.0% in FY26, as lower-cost debts are refinanced.

Beansprout's take on Mapletree Logistics Trust's 2Q FY24/25 results

Mapletree Logistics Trust's distributions may stabilise in the coming quarter due to the following reasons:

• Negative rental reversion in China could be behind them by end FY25;

• China’s stimulus measures could lift economic activities and rejuvenate consumer demand;

• More divestments are expected in 2H25 which will bring down gearing and fund acquisitions;

• MLT could refinance expiring debts with lower-cost RMB debts.

MLT is currently trading at 1.09x price to book, above its historical average. 

Related links:

• Mapletree Logistics Trust share price and share price target

• Mapletree Logistics Trust dividend forecast and dividend history

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