Mapletree Logistics Trust

[thor666]

does anyone know why are they converting from single tenanted to multi tenanted? and why are the associated costs higher?
is this related to the new JTC subletting rules?

thanks

Yes... and contributing to this thread, my minutes of meeting @ MLT AGM, 14 July 2015, 230-430pm.

I was quite lazy to take down all the notes, so only recorded the points that I considered important.

Link to presentation: http://infopub.sgx.com/Apps?A=COW_CorpAn...db5c328c76

On strategy:
- MLT attracts 11/20 of the top 3PL in the world and are keen to "follow the customer" in order to build portfolio in Asia Pan Pacific.
- Going forward, MLT will continue to Divest, Acquire and Recycle strategically. SG regulatory is much more challenging and MLT expects SG portfolio to be reduced proportionally over the years.
- MLT reassure that they take a measured manner to entering markets. MLT has not gone into Thailand, India, Indonesia and Philippines (yet) due to market conditions. (eg India, property ownership title laws are quite ambiguous and MLT feel this is a key risk for REIT in particular).

On Australia: There were a number of queries regarding MLT's maiden acquisition of Coles warehouse. Responses from mgmt:
- This is the only Coles warehouse to serve ALL Coles supermarket in NSW region. The blue chip tenant, long WALE of 19 yrs, yearly rental escalation contributed to the decision to acquire.
- Funding is mainly in AUD and cost of funding is projected at 3%.
- MLT is taking this as a basis to show potential AU opportunities of MLT's capabilities and hope to capture more quality logistics property in AU moving forward.

On Vietnam: MLT currently only has one logistics property in the portfolio. However, the sponsor has multiple properties in VN and they are still able to capture economies of scale.

On China:
- Central and Western China are the areas whre there is higher consumer consumption growth. Key challenges are lack of infrastructure to facilitate the growth. The local govt also are not so exposed to high quality logistic infra. Hence MLT takes effort to educate the govt officials.
- Competition is high in China. Not just GLP that is competing, but even local insurance companies and property developers are attempting to enter the logistics property industry in search of higher profit margins.
- MLT is selling a deep strategy to govt in the sense that they would be able to project with confidence, the type of high quality customers that would come in, the amount of jobs that can potentially be created, the quality of their logistics hub and efficiency, their growth potential. Key move is to not be other players who are looking at buying land as landbank, but to develop value for the areas they are entering in.
- China governments have also realised the need to diversify. They also look at awarding business by different types and nationality to reduce concentration risk.

A funny moment: 2 shareholders asked whether GLP is a threat, and also whether the SG government is controlling GLP and MLT business. Chairman Paul Ma: To assure, MLT is definitely not bound and can compete well with GLP. CEO Ng Kiat: Along the lines of - I may be smaller than (GLP CEO) Chee Meng, but I am no less aggressive!

An applause moment: 1 shareholder asked if MLT would adopt more transparency in the pay of CEO and directors. A long debate went, with CEO saying that she is not merely motivated by salary, but along with the rest of management, driven by a greater purpose. (Applause)
Chairman Ma: So I don't need to raise her salary next year... [emoji14]

Overall a well run AGM. I was quite comfortable with MLT and the AGM reinforced my positive opinion of the business.



Sent from my iPad using Tapatalk

Thefifthperson has a far more comprehensive writeup on MLT than my notes. Certainly very hardworking Rusmin! Excellent stuff and covers a lot of what's said and what's not said.

http://fifthperson.com/8-things-i-learne...-agm-2015/

Sent from my D5503 using Tapatalk

[WH Cheng]

Anybody expecting a Rights Offer to be announced soon to part-finance the acquisition of the Tsing Yi Hub ? Chances seemed low,...

[lonewolf]

UPDATE ON MLT’S TENANT – CWT

As disclosed in MLT’s results presentation slides dated 21 January 2019, CWT is a top tenant of MLT with a revenue contribution of 9.1% for the third quarter ended 31 December 2018. CWT has not defaulted on its rental payments under the various lease agreements with MLT and there are no arrears due from CWT as at the date of this announcement. In addition, MLT currently holds security deposits of 6 months of rental in relation to the leases with CWT.

SOURCE: SGX Annoucement

[cyclone]

Mapletree Logistics Trust launches private placement to raise $250 mil for acquisition of 7 properties

Stanislaus Jude Chan
22/10/2019, 4:51pm

SINGAPORE (Oct 22): The manager of Mapletree Logistics Trust (MLT) has announced a proposed private placement to raise gross proceeds of around $250.0 million to help fund the trust’s proposed acquisition of seven logistics properties in Malaysia, Vietnam and China.

In a bourse filing on Tuesday, MLT says it will offer between 154.6 million and 158.3 million new units at an issue price of between $1.579 and $1.617 each in a private placement to institutional, accredited and other investors.

The issue price range represents a discount of between 3.1% and 5.4% to the volume weighted average price (VWAP) of $1.6685 for all trades in the units in MLT on Oct 21, the last market day before the placement agreement was signed on Tuesday.

The issue price will be determined by the manager and the joint global co-ordinators and bookrunners – Citigroup Global Markets Singapore, DBS Bank, and The Hongkong and Shanghai Banking Corporation (HSBC) Singapore Branch – following a book-building process.

The manager intends to use some $241.7 million, or 96.7% of the gross proceeds of the private placement, to partially fund the acquisitions.

The remaining $8.3 million will be used to pay the estimated professional and other fees and expenses incurred in connection with the acquisitions and private placement.

The manager says it believes that the private placement is an efficient and overall beneficial method of raising funds to finance the total acquisition outlay.

Shopping spree across Asia

The private placement announcement comes just a day after MLT said it is acquiring a clutch of high-quality modern logistics properties at a total acquisition price of $383.9 million to enhance its portfolio and regional network presence.

The proposed acquisitions include a logistics property in Malaysia at an acquisition price of around RM826.0 million ($269.9 million), as well as two logistics properties in Vietnam for a total of US$38.9 million ($53.3 million) through the acquisition of property holding companies.

In addition, MLT is acquiring a 50% interest in each of four logistics properties in China at a total acquisition price of approximately RMB314.3 million ($60.7 million) through the acquisition of property holding companies.

The remaining 50% interest in the China properties will be held by subsidiaries of MLT’s sponsor, Mapletree Investments.

Additionally, in relation to the China acquisitions, MLT’s pro rata share of bank loans owed by these property holding companies to certain financial institutions comes up to around RMB144.0 million. The bank loans will not be discharged and will remain after the completion of the China properties acquisition.

Including estimated professional and other fees and expenses of approximately $8.3 million, MLT’s total acquisition outlay is estimated to be approximately $394.2 million.

The acquisitions are expected to be distribution per unit (DPU) and net asset value (NAV) per unit accretive.

More details in https://www.theedgesingapore.com/capital...se-250-mil

See also https://links.sgx.com/FileOpen/20191022-...eID=582530

[cyclone]

Mapletree Logistics Trust to Acquire Logistics Property in South Korea for KRW35.8 Billion

Mapletree Logistics Trust Management Ltd., as Manager of Mapletree Logistics Trust ("MLT"), announced the proposed acquisition of a logistics property in South Korea, DC Deokpyung (the “Property”), from DC Deokpyung LLC for KRW35.8 billion (~S$41.4 million).

About the Property
The Property is located in Yongin-Icheon, a prime logistics cluster in the south-east region of the Seoul Metropolitan Area (“SMA”). The SMA, with a population of 25.6 million or half of the residents in the country, is the largest logistics hub in South Korea accounting for 70% of the country’s total warehouse supply. Over half of the SMA’s warehouse supply is located in Yongin-Icheon, which is popular with logistics companies due to its superior access to Gyeongbu and Jungbu Expressways, two major expressways running north-south, and to Yeongdong Expressway, the major expressway connecting the east and west coasts. These expressways provide good access to the densely populated areas in the SMA.

Comprising four blocks of dry warehouses, the Property has a total gross floor area of 30,485 square metres (“sqm”) sited on freehold land of approximately 45,935 sqm. It is well designed with good specifications, including direct access to all floors, clear ceiling height of 8 to 13 metres, floor loading capacity of up to 20kN/sqm and large spacious open yards to facilitate high flow logistics operations.

The Property is currently leased to ATN, a domestic third-party logistics service provider and Seha Corporation, a domestic distributor and manufacturer of commercial packaging paper. The leases have a weighted average lease term to expiry of 6.22 years as at 20 January 2020 with built-in annual rental escalations.

The Property has been valued at KRW38.7 billion by Colliers International (Hong Kong) Limited as at 31 December 2019 based on the market approach, discounted cash flow method and direct capitalisation method. The initial net property income (“NPI”) yield is 5.5% with potential for growth when new leases are signed.

More details in https://links.sgx.com/FileOpen/20200122-...eID=594192

[specuvestor]

Another acquisition
https://www.mapletreelogisticstrust.com/..._final.pdf

Spot the lemon in the package Demand is overwhelming I think due to good experience from REIT fund raising past 2 years.

[weijian]

Contrast to some other lemon sponsors, Mapletree seems to have attained a "Black Gold" status in Singapore.

In addition to zero rates, Mapletree is also selling at a time when the cost of equity is low right now due to its high share price. This big acquisition is most probably going to result in a rights offer. From an asset allocation standpoint of an OPMI, the cost of equity is low would mean that on the other side of the deal, it is disadvantageous to the OPMI to be coughing our own money up for the equity.

The best scenario for an OPMI would be to fork out our own money when the cost of equity is high, for a quality acquisition or temporary distressed scenario. Of course, we don't have them right now and I guess MLT investors are still much better off when we contrast with the lemons.

[mobo]

Contrast to some other lemon sponsors, Mapletree seems to have attained a "Black Gold" status in Singapore.

In addition to zero rates, Mapletree is also selling at a time when the cost of equity is low right now due to its high share price. This big acquisition is most probably going to result in a rights offer. From an asset allocation standpoint of an OPMI, the cost of equity is low would mean that on the other side of the deal, it is disadvantageous to the OPMI to be coughing our own money up for the equity.

The best scenario for an OPMI would be to fork out our own money when the cost of equity is high, for a quality acquisition or temporary distressed scenario. Of course, we don't have them right now and I guess MLT investors are still much better off when we contrast with the lemons.

A low Cost of Equity is certainly disadvantageous to new OPMI because that means they are paying a higher price. However this can be advantageous for existing OPMI if market demand for new investors is high enough.
 
If we use the recent China acquisitions as a reference, the resulting funding mix and structure is very favorable to existing OPMI even though they are “expensive” for new OPMI. The fact that MLOG is able to cut down the request for funding from existing unitholders to such a small amount and structure it as a NRO instead of a typical rights issue is very beneficial to existing unitholders regardless of whether they subscribe or give it a pass.

The Mapletree REITs are currently in a virtuous cycle in which their "black gold" status is allowing them raise capital at very low cost making it relatively easy to do accretive acquisitions.

This in turn drives up unit price and even more demand from new OPMI as they are eager to become old OPMI to reap the benefits. I foresee this might go on for quite a while yet. 

Contrast this to many lemon sponsors who went for short term gains by offloading lousy assets to their REITs at exorbitant prices, those REITs subsequently fell into a vicious cycle with ever increasing cost of funds rendering it difficult to conduct accretive acquisitions which further limits growth and puts downward pressure to unit price.

[specuvestor]

Agree there are much bigger lemons out there which VBs including myself have commented.

As usual all these will come back to haunt when interest rate start normalising and cost of capital goes up. Then we will know who has been swimming naked. Until then enjoy the view... Then again even at this environment there are those holding big lemons that have drowned

All said SG GLCs does tend to suit up and have a supplier for bathing suits on standby if 2009 was any indication:
https://www.valuebuddies.com/thread-1928...#pid132185
That doesn't mean capital loss is not a reality

[weijian]

Under pg8 of AR23/24, it is stated that MLT yield is at 6.2%, with a 310bps yield spread over the 10year SGS bond yield (3.1%). Since we know REITs are financially engineered, it would be instructive to peel off the financing layers and see the true yield spread (if any) over the 10year SGS yield.

FY23/24 distribution=447.1mil
Distribution/unit=9.003cents
No. of units=447.1mil*9.003cents ~ 4966.1mil
Unit price on 31st March 2024: S$1.46

(1) Mgr fees paid in units According to Note A (pg117), 56.7mil of fees are paid in units. If they were paid in cash, actual distribution would actually be 447.1mil - 56.7mil = 390.4mil.

(2) Levered up yield. MLT has ~5.3bil of borrowings on 6.9bil worth of equity --> translating to 5.3/6.9=77% gearing. To normalized to unlevered yield, the actual yield will have to be divided by 1.77. Of course, if there are no borrowings, the annual interest cost of 146mil will be saved and distributed. Total distribution = 390.4+146 = 536.4mil or 536.4/4966.1 = 10.8cents/unit

Distribution Yield as per AR = 9.003cents/S$1.46 = 6.2%
Unlevered distribution yield = (10.8cents/1.46)/1.77 = 4.2%

So after removing the financial engineering, there is close to 200bps reduction in distribution yield and only 110bps above the 10year SGS. The "true" MLT dividend yield looks to be comparable to the STI Index or some of the other locally listed companies (especially those that have little/no loans and plenty of operating leverage).

AR23/24: https://links.sgx.com/FileOpen/20240625-...eID=807491