Mapletree Industrial Trust downgraded by CGS-CIMB

Mapletree Industrial Trust property at 18 Tai Seng in SingaporeMapletree Industrial Trust property at 18 Tai Seng in Singapore

CGS-CIMB downgraded Mapletree Industrial Trust to Hold from Add after the REIT’s units posted a strong performance on news it entered a deal to acquire a U.S. data centre portfolio.

“Acquisition catalysts have been played out in the short term,” the brokerage said in a note Tuesday. “Despite the downgrade, we continue to like MINT for its visible growth profile and execution track record.”

In mid-September, Mapletree Industrial Trust said it formed a 50:50 joint venture with Mapletree Investments to acquire a US$1.4 billion, or around S$1.90 billion, data center portfolio in North America from Digital Realty Trust.

The brokerage said the REIT’s earnings were in line with its forecasts, with the fiscal first half DPU at 48 percent of its full fiscal year forecast.

Mapletree Industrial Trust reported Tuesday its fiscal second quarter net property income rose 13.3 percent on-year to S$79.99 million on contributions from new projects at 18 Tai Seng, 30A Kallang Place and Mapletree Sunview 1.

The distribution per unit (DPU) for the quarter came in at 3.13 Singapore cents, up 4.0 percent from 3.01 Singapore cents in the year-ago quarter, even as the number of units increased by 16.7 percent on-year, the REIT said.

CGS-CIMB said it expected fiscal second half earnings could improve upon the fiscal first half due to the full contribution from a new 25-year lease with Equinix at 7 Tai Seng, which began mid-September after a two-month rent-free period.

In addition, the staggered completion of the U.S. data center’s late this year and early next should boost upcoming results, the note said.

CGS-CIMB kept its target price on Mapletree Industrial Trust unchanged at S$2.44.

The units were up 0.79 percent at S$2.54 at 11:59 A.M. SGT.

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