Mapletree Industrial Trust (MINT) is a “resilient dividend anchor” and its recent share price weakness is “mispriced”, say DBS Group Research analysts Derek Tan and Dale Lai.
MINT’s unit price has declined 7.14% year to date, but are up nearly 2% over the past month.
Investors were perhaps rattled by concerns over dividend sustainability amid expected non-renewals and capital value risk in the USA, note the analysts. However, Tan and Lai believe the manager has actively managed the portfolio, successfully renewing or back-filling of around 70% of expiries over the past two years, “demonstrating the continued relevance of their assets to enterprise needs”.
Nevertheless, potential divestments to optimise the portfolio could help to manage overall risk, add the analysts. “Furthermore, new contributions from Japan, selected US assets and a focus on lease-up at Hi-Tech Park @ Kallang will be key in driving upside surprises to our estimates.”
Still, DBS Group Research have lowered their target price to $2.60 from $2.75, while maintaining “buy” on MINT.
Investors’ concerns ‘overplayed’
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MINT’s unit price has underperformed the REIT index, note Tan and Lai, but recent market talk of MINT’s “ageing” data centre assets and potential downside risks to earnings are “not new”.
“We believe investors are overly discounting the portfolio’s overall resilience. Trading at FY2026-2027 yields of 6.4% and a price-to-book ratio of 1.2 times, which are below historical mean, we see value in MINT and recommend investors revisit MINT at current levels,” they add.
Investors’ concerns over income stability is “overplayed”, says DBS, as MINT’s Singapore cashflows are “on a steady growth trajectory”.
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MINT’s portfolio has continued to deliver resilient earnings over the years and has consistently delivered earnings exceeding both DBS’s and consensus’ estimates, say the analysts.
MINT’s financial year ends on March 31. “The recent 9M2025 results further reinforced this trend of steady portfolio occupancy and positive rental reversions of 9.8% across most property segments in Singapore,” say Tan and Lai. “9M2025 distributable income was also 80% of our full-year estimates, suggesting that full-year performance is likely to post a strong beat.”
Considering the strong operational results, DBS has revised its estimates, raising distribution per unit (DPU) by 3% in FY2025 and lowering by 4% to 7% in FY2026-2027 to account for “more conservative occupancy assumptions”.
Investors ‘ignored’ MINT’s balanced exposure
Tan and Lai believe investors “largely ignored” MINT’s balanced geographical exposure — at 47% in Singapore, 7% in Japan and 46.1% in the US — which offers “stable returns across market cycles”.
Despite the widely-anticipated vacancies in MINT’s US data centre portfolio, DBS thinks the REIT’s Singapore and Japan properties balance the overall income profile.
In FY2027, while the major lease expiry from AT&T at San Diego amounting to 3% of revenues remains the key uncertainty, DBS believes that the shortfall can also be compensated by continued lease-up at Hi-Tech Park @ Kallang Way, leading to stability for overall distributions.
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In Singapore, portfolio occupancy rates have remained resilient at 93% to 94% with reversions of 5% to 9%, note Tan and Lai. Hi-Tech Park @ Kallang Way is 58% leased as of 3QFY2025 and is projected to hit 70% milestone by end FY2026 and 85% in FY2027. The DBS analysts think this is conservative.
Relief rally
DBS believes MINT “warrants a re-look” as it is trading below 1 standard deviation of the mean.
“With income resilience proving steadier than market expectations, we anticipate a relief rally in the stock, driving valuations back towards historical mean levels,” adds Tan and Lai.
MINT offers good value on various valuation metrics, they add. “MINT offers good value at the current level, with potential upside ranging from $2.32 [to] $2.60, supported by historical trading range. With MINT’s earnings expected to exceed consensus, we see a lift in the stock’s overhang.”
As at 1.45pm, units in MINT are trading flat at $2.08.
