After Mapletree Logistics Trust’s (MLT) announcement about its largest proposed acquisition ever more than a month ago, Maybank Kim Eng Research (MBKE) is bullish on the REIT’s potential upside in the near future.
Nevertheless, MBKE thinks Ascendas REIT (AREIT) and Mapletree Industrial Trust (MINT) might be in an even better position considering the large debt headroom.
AREIT recently announced a done deal last week regarding its first FY18 acquisition to contribute to an expansion in Australia.
In the meantime, MINT’s Singapore hi-tech track record is a great foundation if the REIT were to go ahead with its expansion into global data centres following its expression of interest recently too.
AREIT can see a 1.0-8.0% increase in dividends while MINT can see as high as a 4.0-18% increase in dividends.
MBKE expects demand for industrial property in the next 12 months to grow, particularly the business parks and hi-tech areas.
As of now, industrials REITs are trading at 7.0% while the Singapore REITs, in general, are at 6.0%. That’s not even pricing in the accretive deals yet.
MBKE also pointed out industrial production has been showing double-digit growth in the recent months and thus, forecasting a 2017 GDP growth of 3.0%.
Last but not least, the Singapore Business Federation expects more CapEx in the next six months after surveying 3,600 SMEs, pointing towards a stronger 2018.
Maybank Kim Eng Research’s BUY calls:
- Ascendas REIT (SGX: A17U) – target price $2.90
- Mapletree Logistics Trust (SGX: ME8U) – target price $1.19
- Mapletree Industrial Trust (SGX: M44U) – target price $2.05