Mapletree Logistics Trust

2Q gross revenue was SGD 177 million, down 3.2% year-on-year, and NPI was down 3.3% year-on-year. DPU was SGD 0.01815, down 10.5% year-on-year versus SGD 0.02027; excluding divestment gains of SGD 6.1 million, operating DPU was 4.8% lower year-on-year but 0.2% higher quarter-on-quarter. On a constant-currency basis, gross revenue and NPI would have declined by 0.9% and 1.0%, respectively. Portfolio occupancy was 96.1%, WALE was 2.7 years, aggregate leverage was 41.1%, NAV was SGD 1.26, and average debt maturity was 3.6 years. For the next 2 quarters, management guided cost of debt at about 2.7% and said SGDs 819 million of committed facilities are available for refinancing needs over the next 12 months.

Jean Kam said the external environment remains uncertain, with trade tensions and weak domestic consumption still weighing on sentiment, but she highlighted signs of stabilization in China and resilience elsewhere in the portfolio. She said China appears to be bottoming in some regions, while East China remains the main concern because vacancy there is still around 26%. She also emphasized continued portfolio rejuvenation, selective acquisitions, and more opportunities from lower rates, but stressed discipline and a selective approach.

Charmaine said the quarter’s revenue and NPI decline was mainly driven by currency depreciation and the absence of divested assets, partly offset by the AEI at 5A Joo Koon. She noted borrowing costs fell to 2.6% from 2.7% last quarter because of lower SORA and HIBOR, but expects around 2.7% in the second half and broadly stable costs next financial year, depending on unhedged rates. She also highlighted 84% fixed-rate hedging, 75% FX hedging, SGD 819 million of committed facilities, leverage at 41.1%, and green financing of SGD 1.5 billion, or about 27% of total borrowings.

Analysts focused on China reversions and occupancy, Joo Koon leasing ramp-up, debt cost guidance, divestment timing, and whether lower rates could speed asset sales. Management said China rent reversion should improve and could be neutral by Q4 or by the end of the financial year, with China occupancy likely to hover around 94% or better; for East China, 36% of the balance-of-year expiries are due there, and next year another 25% to 30% are expected. On Joo Koon, management said rentals on remaining leases should be higher as incentives roll off, with revenue contribution rising over the next two quarters and full contribution expected from 3Q onward. On divestments, they said interest is improving, especially in Greater China, but pricing negotiations remain ongoing; the planned China exit vehicle is a renminbi fund, targeted around Q4 or likely Q1 next financial year.