SINGAPORE (March 30): DBS likes Mapletree Logistics Trust best among the four Mapletree REITs as MLT offers the most exciting acquisition prospects given an extensive pipeline of stabilised assets that are ready for acquisition.

Recently, DBS hosted a Mapletree REIT day in Bangkok for investors to meet with the management of the four listed Mapletree REITs - Mapletree Commercial Trust (MCT), Mapletree Greater China Commercial Trust (MAGIC), Mapletree Industrial Trust (MINT) and MLT.

In a Thursday note, lead analyst Derek Tan is sensing a general improvement in operating outlook for most sectors (industrial and office) in 2017-2018.

This comes mainly on the back of abating supply risk, especially in the industrial sector (positive for MLT and MINT) where DBS sees a gradual turnaround in demand on the back of positive manufacturing numbers.

“If sustained, this will imply business expansion and positive take-up rates in the medium term,” says Tan.

Despite the weakness in the near-term retail sector outlook, MCT's and MAGIC’s portfolios stand tall against competition in their respective sub-markets of Singapore and Hong Kong.

“Both REITs are expected to continue reporting positive rental reversions, ahead of peers,” adds Tan.

Given their large market cap, liquidity and strong sponsor lineage, the Mapletree group of REITs typically enjoy better valuations and lower cost of capital than peers.

Three out of four REITs are trading above their respective net asset values (NAV) too, says Tan.

This is supportive of acquisition activities, providing the REIT with an added avenue of growth.

“Among the four REITs, we believe that MLT offers the most exciting acquisition prospects given an extensive pipeline of stabilised assets which we believe are ready for acquisition,” says Tan.

Mapletree Commercial Trust, Mapletree Greater China Commercial Trust, Mapletree Industrial Trust are trading higher at $1.515, $1.02 and $1.78 respectively while Mapletree Logistics Trust is trading flat at $1.09.