Mapletree Logistics Trust Earnings: New Acquisitions Offset Currency and Interest Rate Headwinds

Mapletree Logistics Trust’s Japan and South Korea acquisitions helped the trust to reverse three consecutive quarters of revenue and net property income decline, and to post a positive quarter-on-quarter growth of 1.8% and 2.5%, respectively, in first-quarter fiscal 2024 (ending March). Distribution per unit, or DPU, was also up 0.1% quarter on quarter to SGD 0.02271 per unit after the trust topped up its distribution from a write back on a previous capital gain tax provision. As the results were in line with our expectations, we retain our fair value estimate of SGD 1.66. We think the trust is fairly valued currently as it trades at a fiscal 2024 dividend yield of 5.2% and encourage investors to wait for a better entry point. Looking ahead, we expect contributions from its newly acquired Japan, South Korea, and Australia assets to drive near-term growth and offset some of its currency and interest rate headwinds. However, we also expect the trust’s China portfolio, especially in tier 2 cities, to drag on its leasing performance, given weakness in the overall China economy.