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16 Quick Things to Learn from Mapletree Logistics Trust’s Annual General Meeting

From time to time, Foolish hats turn up at annual general meetings (AGM).

My better half is a shareholder of Mapletree Logistics Trust(SGX: M44U). Yesterday, I attended the real estate investment trust’s AGM as her proxy. As a brief introduction, Mapletree Logistics Trust owns 127 logistics-based properties in eight countries, as of 31 March 2017.

Without further ado, here are eight quick things I learnt from the AGM.

1. to 8. For the first eight, please head here.

9. Mapletree Logistics Trust still has a sizable pipeline of projects from its sponsor. The total combined gross floor area is 3.9 million square metres. The vast majority of the space (2.6 million sequare metres, to be exact) comes from China.

10. Mapletree Logistics Trust is putting up two Japan assets for divestment, the Zama Centre and Shiroishi Centre. Ng Kiat, the chief executive of the REIT’s manager, said that the Zama Centre does not have a ramp (which makes it less attractive) while the Shiroishi Centre’s floor loading factor was outdated. The REIT expects to lock in a divestment gain of $2.9 million.

11. Lease tenure of the REIT’s properties was a concern. During the question and answer session, a unitholder asked whether there were examples in Singapore where the government approved an extension of existing leases. Ng said that there were selected cases where the tenure was extended, but also added that it was not the majority of cases.

12. Another question was posed on the use of perpetual bonds as a source of funding. The unitholder pointed out that the bond’s distribution rate of 4.18% was higher than the weighted average interest rate. Chairman Lee Chong Kwee said the move was to create varied sources of financing for the REIT.

13. What about plans for India, another unitholder asked? The unitholder said that Ascendas India Trust (SGX: CY6U) was very bullish about India. Ng said that India was still a “country of interest” but acknowledged that the REIT faces challenges in India. She said that the clarity of regulations and laws in India remains a challenge.

14. As a counterpoint, Ng also pointed out that Ascendas has pulled out of Vietnam and China but Mapletree is looking to grow in these two countries. She felt that each REIT will play to its own strengths.

15. A unitholder asked a pointed question: Was the decision to dole out the divestment gain a sign that the distribution per unit is expected to fall in the coming year? Ng said that the payment of the divestment gain was not a ploy to cushion the REIT’s DPU.

16. Mapletree Logistics Trust’s leverage ratio stood at 38.5% as of 31 March 2017. The ratio is fairly close to the regulatory limit of 45% set by the MAS. A unitholder asked if Mapletree Logistics Trust had any target ratio in mind. Lee said that the ratio cannot be viewed in isolation and must be considered together with other factors like the opportunities that are available.

An AGM is a great source of information that can help investors find out more about a company’s business and what it has in store for the future. I hope my notes are useful in helping investors learn about Mapletree Logistics Trust in greater detail.


Editor’s note
Ascendas-Singbridge representatives reached out to us and provided the following clarification for point 14: 
 
Ascendas-Singbridge Group continues to maintain a presence in China and Vietnam. Ascendas Reit, a listed fund under the Group’s subsidiary Ascendas, retains a well-diversified portfolio spanning Singapore and Australia following the divestment of three properties in China in 2016.

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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.