SINGAPORE (Oct 25): Maybank Kim Eng is revising the target price of Mapletree Logistics Trust (MLT) upwards to $1.25 given the Tsing-Yi acquisition and following its 2Q18 results.

However, the research house is maintaining its "hold" call given logistics supply challenges.

Maybank is also reiterating its "buys" on Ascedas REIT with $2.90 target price and Mapletree Industrial Trust with $2.05 target price for their stronger acquisitive growth outlook as they push on to deliver on their potentially debt-fuelled inorganic growth mandates.

In 2Q18, MLT posted a 1.5% increase in DPU to 1.887 cents from a year ago, helped by contributions from acquisitions in Australia, Malaysia and Vietnam but offset by divestments in Japan and Singapore, and redevelopment downtime at its China Ouluo Logistics Centre.

Gross revenue increased 2.3% to $93.7 million from last year.

Portfolio occupancy rose q-o-q from 95.5% to 95.8% with all geographies reporting stable or improving occupancies.

MLT's manager says this reflects stable performance across all markets, augmented by contributions from acquisitions which were completed last year but partially offset by the absence of contribution from three divestments and one of two blocks under redevelopment in China.

In addition, MLT's aggregate leverage fell q-o-q to 33.7% from 39.0% due to its $640 million equity fund-raising exercise, redemption of $350 million, 5.375% perpetual securities and new $180 million, 3.65% perpetual securities issuance.

See: Mapletree Logistics Trust eyes $640 mil from equity fund raising to partially fund HK acquisition

In August, MLT announced its largest acquisition to date -- Mapletree Logistics Hub Tsing Yi -- for $834.8 million, lifting aggregate leverage to 38%.

See: Mapletree Logistics Trust to acquire Hong Kong warehouse for $834.8 mil

MLT also managed to extend the average debt maturity to 4.7 years from 4.0 years as borrowing costs stayed at 2.3%, with 91% of its total debt hedged into fixed rates.

In a Wednesday report, analyst Chua Su Tye says, "MLT will continue to step hard on capital recycling efforts, with acquisitions focused on its sponsor pipeline or larger third-party assets to deepen its Pan-Asian footprint, or expand into new geographies, possibly India or Indonesia."

Meanwhile, Chua expects the $5.4 million gains from divestment proceeds to be distributed over six to eight quarters from 2Q18.

As at 12.25pm, units in MLT are trading 3 cents higher at $1.29 or 1.1 times FY17 NTA with a yield of 5.9%.