MAPLETREE Logistics Trust (MapletreeLog) is in advanced talks to buy assets in Asia, as its business outlook improves.
It said this yesterday as it reported a net property income of $44.1 million for the third quarter ended Sept 30 – 9.5 per cent higher than a year ago.
‘We are in a position to consider some growth in line with our ‘yield plus growth’ strategy,’ said Chua Tiow Chye, CEO of trust manager Mapletree Logistics Trust Management. ‘With less competition from buyers in the region, we believe sellers will be less demanding in terms of asking prices and cap rates for disposing of their properties.’
For instance, MapletreeLog believes that deals commanding a capitalisation rate of about 9 per cent in Singapore are possible.
It emphasised that the acquisitions will be accretive, and will not lead to significant movement in its gearing. It will fund purchases through a mix of debt and equity, and capital from any equity fund-raising exercise will not go towards recapitalisation.
As at Sept 30, MapletreeLog’s aggregate leverage ratio was 38.1 per cent, slightly higher than the 37.8 per cent three months previously. It says it faces no refinancing risk this year; it has $19 million of working capital loans due for renewal in Q4, which can be covered by committed revolving credit facilities.
MapletreeLog’s amount distributable in Q3 was $28.8 million, reflecting an increase of 13.2 per cent over the same period last year.
Nevertheless, available distribution per unit (DPU) fell because of the larger unit base from a rights issue in August last year. The DPU in Q3 was 1.48 cents, 19.6 per cent less than the 1.84 cents a year ago.
Adjusting for the rights issue, the proforma DPU in Q3 last year would have been 1.31 cents, translating to a year-on-year growth of 13 per cent.
The occupancy rate across MapletreeLog’s portfolio dipped from 98.3 per cent in June to 97.1 per cent as at Sept 30. But ‘while the environment remains challenging, we expect pressure on occupancy and rental rates to ease a little with the improving outlook’, said Mr Chua.
The counter closed unchanged yesterday at 75 cents.
Source: Business Times, 23 Oct 2009