3 Key Slides Investors Should See About Mapletree Logistics Trust

Credit: Axisadman

Mapletree Logistics Trust (SGX: M44U) is Singapore’s first Asia-focused logistics real estate investment trust (REIT).

At the moment, it owns 118 logistics-related properties in Singapore, Hong Kong, Japan, China, Malaysia, South Korea, Australia, and Vietnam.

The REIT held its annual general meeting (AGM) last month and had prepared a presentation that shared interesting and important details about its business. Here’re three slides from the presentation deck that investors shouldn’t miss.

A decade-old REIT

Mapletree Logistics Trust was listed on 28 July 2005. It thus celebrated its 11th year as a listed REIT last month. The REIT’s long-term stock market performance is summarised in the slide below:

2016-07-24 MLT Long Term Returns
Source: Mapletree Logistics Trust’s earnings presentation

The capital appreciation for the period from Mapletree Logistics Trust’s initial public offering to the end of March this year was 49%. This return exceeds the Straits Times Index’s (SGX: ^STI) gain of 25%.

Some of you may think that the capital appreciation does not look that impressive for an 11-year holding period. But now, enter the power of distributions.

Over the same period, Mapletree Logistics Trust had paid out over 100% of its listing price in distributions to unitholders. Said another way, Mapletree Logistics Trust had doubled its earliest unitholders’ investments through distributions alone.

Overarching trends and diversification

The slide immediately below suggests a few things.

2016-07-24 MLT Consumer Trends
Source: Mapletree Logistics Trust’s earnings presentation

For one, Mapletree Logistics Trust is showing how its businesses benefits from the overarching trend of rising domestic consumption across Asia. Over three quarters of its tenants are serving consumer-related industries.

Second, the slide also shows that no one industry takes up more than 25% of the REIT’s tenant base. If one or a few industries falter for the REIT, there may be others that can help pick up the slack.

Lease terms

Industrial properties tend to be sitting on shorter land leases.  In the following slide, Mapletree Logistics Trust summarized the land lease tenure of its properties:

2016-07-24 MLT Land Lease Profile
Source: Mapletree Logistics Trust’s earnings presentation

We can see that less than 5% of the REIT’s properties have land lease tenures of less than 20 years. The majority of its properties have land leases of between 31 years and 60 years. Interestingly, over 28% of the REIT’s properties are freehold.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns units in Mapletree Logistics Trust.