“With a portfolio of logistics warehouses across Asia-Pacific which previously benefited from the China plus one strategy, shift from just in time to just in case supply chain and e-commerce penetration, some investors have expressed concerns about the impact of Asia no longer being the manufacturing hub for the US and the impact of a potential global recession," JP Morgan says.
Around 86% of MLT’s portfolio is focused on domestic consumption in the markets in which it has a presence, with the remaining 14% being exposed to exports.
“At MLT’s closing price of $1.05 as of April 9, we believe it is pricing in a 5% fall in rents and occupancy across MLT’s whole portfolio (core FY2026 DPU of 6.71 cents). Our worst case scenario of a 15% drop in occupancy to reflect loss of all export business exposure and a 20% cut in rents (similar to that experienced in China over recent times) implies DPU of 4.26 cents and a 6.5% yield,” JP Morgan says.
This implies a 38% potential downside from the current share price, the report adds.
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Also, the bond markets have turned extremely volatile with 10-year treasury yields surging 3.4% on April 9 from just 3.9% on April 7.
A tariff war is underway and the great unknown is whether there will be a resolution to that war.
“If we have a resolution of the trade war, MLT’s share price is pricing in a lot of bad news. We think MLT offers long-term value, although there may still be near-term downside risk. We think the pricing in of a 5% impact on rents and occupancy from a potential reordering of global trade may seem too modest for some investors,” JP Morgan concludes.
As of April 9, JP Morgan has retained an overweight recommendation for MLT.
