Analysts have pointed out that as assets age, REIT managers need to rejuvenate their portfolios with modern, state-of-the-art facilities.
MLT plans to divest around $1 billion in assets over the next couple of years, while MINT plans to divest $500 million to $600 million over the next one to two years.
“We have identified a $1 billion pipeline of potential assets for divestment as part of our portfolio rejuvenation strategy, and half of it will come from Greater China,” says Jean Kam, CEO of MLT’s manager, during a results briefing on Oct 29. “Last year we executed about $210 million, to-date we have executed about $60 million post-quarter closing (2QFY2026 for the three months to end September), and for the divestment target this financial year (FY2026), we are targeting about $100 million to $150 million,” Kam adds.
On the face of it, MLT’s divestment pipeline appears a less challenging task than MINT’s. Of the $1 billion, $500 million of the assets are in Greater China, with around half from China and the other half from Hong Kong.
See also: MPACT continues to face challenges overseas
“On the divestment options for China, we are in discussions and we have received interest from some insurance companies and SOEs (state-owned enterprises) on a few of our assets in China,” Kam says. She is looking to divest some of the mainland Chinese assets at valuation into a renminbi (RMB) income fund and is working with sponsor Mapletree Investments on this. The sponsor is likely to bring in capital partners for the fund. The Hong Kong assets are likely to be divested to third parties.
“The RMB fund is something that we are exploring as a possible exit option,” she confirms.
“We have been trying to sell assets with older specifications in Korea, Singapore and Malaysia. These would be less sensitive to the interest rate environment, but more about whether the end user or the buyer finds our properties relevant for their business requirements,” Kam says.
See also: ParkwayLife REIT's manager announces board changes
JP Morgan believes that MLT has reached an inflexion point, with declines in China likely bottoming out. For instance, although MLT’s 1HFY2026 DPU fell by 11.4% y-o-y to 3.627 cents, and its 2QFY2026 DPU declined by 10.5% y-o-y to 1.815 cents, the REIT’s DPU for the second quarter rose by 0.2% q-o-q. This translates into an annualised DPU yield of 5.4%.
Based on trends, negative rental reversions in China have decelerated significantly. “Our overall rent reversion was 0.6%. Excluding China, rent reversion was 2.5%. In Singapore, it was 3.9%. Japan was zero flat, Hong Kong, 0.7%; South Korea, 1.1%; Malaysia, 3.4%; China, –3.0%; and Vietnam, 4.3%,” says James Sung, head of asset management and marketing at MLT’s manager.
“We see the rate of decline decelerating as negative rental reversions in China moderate,” notes a recent JP Morgan report on MLT. In 1QFY2026, China’s rental reversions were –7.5% in 1QFY2026, –9.4% in 4QFY2025 and –10.2% in 3QFY2025, respectively.
Sung is circumspect about definitively pointing to an inflexion point for China. “The inflexion point is hard for us to have a forecast on, with current weak demand. The excess supply will take one to two years to be absorbed,” he says, alluding to oversupply in Eastern China.
Nonetheless, JP Morgan believes that MLT is likely to recover further, and its unit price is expected to be underpinned by investment demand. “Signs of stabilisation, which has been a powerful share price re-rating catalyst for [its] sister REIT, Mapletree Pan Asia Commercial Trust and one of the reasons for our upgrade of MLT to overweight from ‘neutral’ (on Oct 28), are also evident with China negative rental reversions moderating to –3.0% from –7.5% in 1QFY2026,” JP Morgan confirms.
MINT faces challenges
MINT has a steeper hill to climb. Its US data centre portfolio, which accounts for 47.2% of its $8.5 billion in assets, presents both opportunities and challenges. The opportunity lies in the US interest rate cycle. As the Federal Reserve lowers its Federal Funds Rate, the risk-free rates should fall. However, the 10-year US Treasury yield is currently 4%. The five-year US Treasury yield, which is the rate at which MINT references its US debt, is 3.7% as of Oct 30. Over the next 12 to 15 months, as US President Donald Trump pressures the US Federal Reserve to lower rates, MINT could benefit.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
In the near term, though, the US data centre portfolio faces challenges due to non-renewals.
Separately, borrowing costs fell to 3.0% from 3.1% in 1QFY2026 due to lower floating rates on unhedged loans and the repayment of higher-cost debt with divestment proceeds, which contributed to aggregate leverage falling 2.1 percentage points q-o-q to 37.3%.
“Based on the current yield curve and debt mix (68% US dollar (USD), 19% Japanese yen and 13% Singapore dollar), we believe cost of debt should trend towards 3.5–3.7% over time which is consistent with MINT’s outlook comments stating borrowing costs are anticipated to increase with the repricing of maturing interest rate swaps, which were contracted when interest rates were lower,” JP Morgan writes in an update.
During a results briefing, Khoo Geng Foong, CFO of MINT’s manager, says MINT had $600 million of interest rate swaps, which will be progressively due in the current financial year. MINT has “locked in” $200 million of the interest rate swaps, with $400 million to go.
Despite rates falling, the impact of the replacement interest rate swap hedges is about $9 million to $11 million, as most are based on onshore USD rates.
In the next financial year, the swaps are at higher rates; hence, the impact of the replacement hedges will be less if five-year rates are at current levels (3.7%), but it could be positive if five-year rates fall to 3%.
The $500 million to $600 million divestment plans are likely to focus on US data centre assets. MINT’s aggregate leverage is at 37.3%. Its debt headroom and divestments will provide it with capital to make acquisitions, including a 50% stake in Mapletree Rosewood Data Centre Trust (MRODCT). MINT and its sponsor own 50% each of MRODCT.
According to Peter Tan, head of Investments at MINT’s manager, 60% of the MRODCT portfolio comprises hyperscalers. The balance are colocation providers. “The issue with our current portfolio is the facilities occupied by enterprise users. Their take in terms of allocation of space and the design of the data centre may not be as efficient as a data centre operator, which makes re-leasing more difficult,” Tan says.
The MRODCT portfolio is more resilient with hyperscalers as tenants, and the leases are mainly triple net and gross leases. Its occupancy rate is above 90%, and capitalisation rates are 5.5% to 6% compared to USD funding at current rates, which would work out at 4.4% to 4.5%. Hence, the yield spread is positive. The valuation of the remaining 50% is around $1 billion.
Analysts who decline to be named, as their reports have yet to be released, believe that MINT may wait for interest rates to fall before acquiring the MRODCT portfolio.
MINT’s distribution per unit in 2QFY2026 declined by 5.6% y-o-y and 2.8% q-o-q to 3.18 cents, translating into an annualised DPU yield of 5.9%. MINT has garnered eight “buy” calls and six “holds” in Bloomberg’s poll of analysts.
