Daiwa cut its target price for Mapletree Industrial Trust to S$2.97 from S$3.13, well below the Bloomberg consensus of S$3.18, citing rising Singapore government securities’ yields and potential leasing issues.
For fiscal 2022, ending 31 March, Daiwa raised its distribution per unit (DPU) forecast by 1.6 percent, pointing to strong performance year-to-date on the acquisition of 29 data centers in the U.S. for S$1.32 billion in July 2021, and other data center acquisitions in March 2021 and September 2020.
But the investment bank cut its DPU forecasts for fiscal 2023 and 2024 by 4 percent to 6 percent on more moderate leasing assumptions for the S$300 million Kolam Ayer 2 redevelopment of flatted factories into a new tech precinct. That development is expected to be completed over the second half of this year and the first half of next year, Daiwa said in a note Wednesday.
Daiwa kept an Outperform call, the investment bank’s second-highest rating after Buy.
“Since its listing in 2010, MIT has transformed its S$2.1 billion (as at 31 August 2010) pure-Singapore industrial-property portfolio, which had a large flatted factory concentration (53 percent of AUM), to a considerably larger datacentre-focused portfolio worth S$8.5 billion (as at 30 September 2021) through a series of timely acquisitions,” Daiwa said. AUM stands for assets under management.
Data centers make up 52.9 percent of AUM, with the bulk in North America, the note said.