CIMB Research raised its target price for Mapletree Industrial Trust, which owns factories and other industrial assets, to S$1.51 from S$1.31 and kept its ‘neutral’ rating, citing higher margins.
By 0253 GMT, units of Mapletree Industrial were flat at S$1.395, and have surged 30 percent since the start of the year, compared with the FTSE ST Real Estate Investment Trust’s 34 percent rise.
Mapletree Industrial said its distribution per unit for the second quarter was 2.29 Singapore cents, 11.7 percent higher than the year-ago period, due to contributions from acquisitions, higher rents and improving margins.
CIMB said the trust has stronger capital management, as it issued a S$45 million 10-year fixed rate note that lengthened average debt tenure to 3.2 years from 2.7 years, yet borrowing cost fell to 2.3 percent from 2.5 percent.
However, CIMB noted that its current price to book value of 1.4 times is among the highest in the sector, and has likely priced in growth potential.
Reporting by Charmian Kok in Singapore; firstname.lastname@example.org; Editing by Jijo Jacob