See: Mapletree Logistics Trust to divest 2 Japan properties for $165 mil
In a Tuesday report, lead analyst Andy Wong says the deal translates into an exit Net Property Income (NPI) yield of about 4.3% as well as an attractive premium of 32% and 10% above the properties’ latest combined valuation and purchase price of JPY10.2 billion ($123.8 million) and JPY12.3 billion, respectively.
The trust expects to recognise a divestment gain of about JPY234 million ($2.9 million) – excluding taxes and transaction-related expenses – over the original purchase cost, which will be distributed to unitholders thereafter.
Noting the management’s active acquisition and portfolio rejuvenating strategy over FY17, Wong also highlights the MLT’s proactive approach in managing its single-user asset (SUA) leases, which he believes would mitigate risks should the SUA leases be converted to multi-tenanted buildings.
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“We factor in MLT’s Japan divestments in our model, and assume that the net proceeds would be largely used to pare down its existing debt. We also increase our occupancy assumptions for some of MLT’s properties,” says Wong.
“Nevertheless, we are maintaining our ‘hold’ rating on MLT as we believe its solid execution capabilities as highlighted earlier and positives have already been priced in by the market,” concludes the analyst.
As at 10.10am, units of MLT are trading flat at $1.19.
