Mapletree Logistics Trust

Gross revenue was SGD 177 million, down 3.2% year-on-year. NPI fell 3.3% year-on-year, and DPU was SGD 0.01815, down 10.5% year-on-year from SGD 0.02027. Excluding the DPU from divestment gains of SGD 6.1 million, DPU from operations was down 4.8% year-on-year but up 0.2% quarter-on-quarter. On a constant-currency basis, gross revenue and NPI would have declined 0.9% and 1.0%, respectively. For the half year, DPU including divestment gains would have been 11.4% lower at SGD 0.03627 versus SGD 0.04095 last year; excluding divestment gains, DPU from operations was 6.1% lower. Looking ahead, management guided cost of debt at about 2.7% for the second half and said they target to keep it stable next financial year. They also said Joo Koon should see full contribution from the initial 60% committed level in 3Q, with the 82% level likely part of 4Q.

Jean Kam emphasized that the business is showing stabilization, especially in China and Singapore, even though global trade uncertainty is still weighing on sentiment. She said China appears to be bottoming in the West and Central regions, while East China remains the main area of concern because vacancy is still around 26% and absorption could take 1 to 2 years or more. On capital recycling, she said divestment activity is picking up as rates ease, but the team remains selective and expects only modest gains from most disposals.

Sheh Min Lum said the quarter’s weaker reported revenue and NPI were mainly due to FX depreciation and the absence of divested assets, partly offset by the AEI at 5A Joo Koon and better performance in markets outside China. She noted borrowing costs fell on lower SORA and HIBOR, but some of that benefit was offset by AEI-related debt, replacement hedges, and higher base rates on KPI loans; interest cost came down to 2.6% from 2.7% last quarter and is expected to be around 2.7% in the next two quarters. She also highlighted leverage at 41.1%, NAV at SGD 1.26, SGD 819 million of available committed credit facilities, 84% of debt hedged into fixed rates, and 75% of FX hedged into Singapore dollars.

Analysts focused on whether China rent reversions had bottomed, and management said the negative reversions should improve and could be neutral by Q4 or by the end of the financial year if conditions hold. Questions also centered on Joo Koon ramp-up, where management said remaining leases should carry higher rents and that revenue from the AEI was about SGD 1 million in 2Q, with contributions expected to increase over the next two quarters. On divestments and capital allocation, management said Greater China sale interest is improving, the China exit is likely to use a renminbi fund rather than a CREIT structure, and future divestment gains will generally be retained to strengthen the balance sheet unless a large gain emerges.