by winston » Wed Jun 24, 2020 1:34 pm
not vested
Mapletree Industrial Trust (MINT SP) - Proposed acquisition a testament of quality
Mapletree Industrial Trust (MIT) announced its proposed acquisition of the remaining 60% interest in a portfolio of 14 data centres in the US from its sponsor.
The agreed portfolio property value of US$823.3m (~S$1,169.1m) on a 100% basis translates into an NPI yield of 6.8%.
This is only a tad lower than the initial NPI yield of 6.9% when the portfolio was first acquired in 2017.
Upon completion of this proposed acquisition, data centres in Singapore and North America will constitute ~39% of its portfolio by AUM (versus 31.6% previously) and will move MIT further up the industrial value chain, which we view positively.
To fund this acquisition, MIT also announced a private placement of 146.4m new units (upsize option exercised) at an issue price of S$2.80 per unit to raise gross proceeds of S$410m.
Its pro forma FY20 aggregate leverage ratio is estimated to increase from 37.6% to 38.7%, but it is likely to come in lower now with the strong demand for its placement exercise.
We incorporate this deal in our model, and also factor in additional rental concessions to tenants.
We lower our FY21F DPU forecast by 1.7% but increase our FY22F projection by 3.8%.
We also lower our cost of equity assumption from 6.8% to 6.3% to take into account MIT’s continued progression towards a more resilient portfolio constitution with stronger earnings visibility.
Consequently, our fair value is bumped up from S$2.84 to S$3.25. BUY.
Source: OCBC
It's all about "how much you made when you were right" & "how little you lost when you were wrong"