5 New Things that I Learnt about Mapletree Logistics Trust from AGM 2024

This was my second time attending Mapletree Logistics Trust‘s (SGX: M44U), or MLT, AGM. Attendance was so high that they had to open the overflow room for latecomers.

This surge in interest could be due to two factors: it was CEO Ng Kiat’s last AGM, or perhaps shareholders are concerned about the recent weak performance in the REIT’s share price.

Interestingly, I also noticed a shift in CEO’s demeanour this year. She seemed to exude more warmth, smiling a bit more frequently.

I am not going to repeat what can be found in the Annual Report, AGM slides and their responses to advanced questions from the shareholders (links provided at the end).

Here are five new insights I gained about MLT from the AGM. Please note these are my interpretations and not verbatim. Wait for the official minutes for verification.

The average occupancy of China properties is 78.2% vs MLT’s 93.2%

This indicates the quality of MLT’s properties and their strong reputation within the market. If they can navigate this challenging period, they’re well-positioned to thrive when the market recovers.

When asked by a shareholder how did MLT manage to find a buyer for its Xian property, CEO shared that it was sold to an end-user. The buyer is using the property and not looking for rental. She opined that there’s still ample liquidity from small and medium enterprises (SME) in China.

50% of tenants rent MLT’s properties in more than one country

MLT is working on increasing the number of tenants who rent properties across multiple countries. Currently, it is common to have the same tenants to be in two countries but rare to have them in four.

This strategy strengthens relationships with tenants, providing MLT with a significant competitive advantage.

Hong Kong is the world busiest air cargo hub

Besides the slow increase in warehouse supply, HK being the world’s busiest cargo airport drives strong demand and rent increase for MLT’s properties.

CEO highlighted this advantage, explaining that even China uses Hong Kong’s well-connected airport to ship air cargo internationally.

Not doing equity fundraising (EFR) in the near term

MLT is not looking at EFR in the short term. If necessary, they will raise capital by divestment and continue to dividend reinvestment plan (DRP).

Weighted average annualised interest rate to rise to 2.7-2.8% for upcoming year

CFO projected that interest rate will increase from current 2.5% to about 2.7-2.8% for the upcoming year. This will increase borrowing cost by about $10 million (if I heard it correctly).

Looking Forward

It is likely that dividends per unit (DPU) for the upcoming financial year will drop. However, even with a 10% drop to 8.2 cents per unit, the DPU would still translate to an attractive yield of around 6% at the current share price of $1.37.

I recently rebalanced my portfolio and trimmed some holdings. However, I remain confident in MLT’s long-term potential and will be holding onto the rest of my shares.

I am looking forward to see their upcoming 1Q 2024/2025 earnings report on July 24th, which may provide further evidence of their ability to weather these challenges.

Related materials: Annual Report 2024, AGM Slides 2024, Responses to Substantial and Relevant Questions from Unit holders

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