To recap, the REIT booked a net divestment accounting gain of $34.3 million in 1Q19, which resulted from MLT’s completion of its divestment of 7 Tai Seng Drive to its sister REIT, Mapletree Industrial Trust.
In a Tuesday report, analyst Andy Wong says the significant divestment gain was because of the asset’s potential to be upgraded into a data centre, which he believes is not MLT’s forte.
“We raise our FY19F and FY20F DPU by 1.6% and 1.1%, respectively, as we had previously assumed that management would retain some of the divestment gains to be redeployed for acquisitions,” says the analyst.
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“We have not factored in MLT’s recent proposed acquisition of five ramp-up logistics properties in Singapore as we await details of the funding structure and approvals from the shareholders of CWT International Limited,” he adds.
As at 10:36am, units in MLT are trading flat at $1.28, implying a FY19F DPU yield of 6.2%.
