Mapletree Industrial Trust ("MIT") wastes no time in the the execution of its strategic vision of having two-third of its property portfolio in data centres. Coming off the heel of the last US data centers acquisition exercise in 2020, MIT recently announces another US$1.32 billion acquisition of 29 data centres from Florida based Sila Realty Trust.
New engine of growth
Data centres remain resilient with attractive growth opportunities, which are underpinned by the acceleration of digitalisation, cloud adoption and e-commerce during the pandemic. The completion of the significant acquisition of the 29 data centres will mean that MIT now has 53.6% of the REIT's entire portfolio vested in this key property segment relative to 41.2% pre-acquisition. MIT total assets under management thus will increase from $$6.8 billion to S$8.6 billion.
MIT expects the proposed acquisition to be distribution per unit (DPU) and net asset value per unit (NAV) accretive to unitholders. Based on pro forma estimates, assuming the proposed acquisition was completed on 31 March 2021, it would boost DPU by 3.3 per cent to 12.97 Singapore cents. NAV would rise to S$1.76 per unit from S$1.66 per unit.
Key dates and points to note for the preferential equity raising exercise for retail investors
MIT will be issuing 5 new units for every 100 units which retail investors currently hold at S$2.64 per unit. Based on the market closing price of S$2.75 per unit as at 28 May 2021, this represented a discount of 4% off the latest market price. Existing investors will also receive a quarterly dividends of S$0.021 per unit cut off as at 28 May 2021.
The rights issue will commence from 3 June 2021 to 11 June 2021 so be sure to subscribe for it.
If you are holding under your own CDP account, go to the local ATM for subscription. If the units you held are under other brokerage nominee accounts such as Maybank Kim Eng or Tiger Brokers etc, then use their designated inhouse system for giving your instruction.
Parting thoughts
The frustrating aspect of owning a Mapletree REIT is that it tends to be overvalued with market pricing trading way above its NAV per unit and hence resulting in a lowly distribution yield of around 4%.
During the past week, I actually sold off part of my MIT holdings at S$2.83 per unit and use the proceeds to purchase another industrial REIT, Ascendas, which has dropped below S2.94 per unit. In a strange twist of fate, Ascendas REIT pricing declines when it announced the acquisition of the remaining 75% stake in Glaxis business park in Fusionpolis (via private placement at S$2.94 per unit) whereas, MIT unit price shot up when they announced the US$1.32 billion acquisition of data centres.
For long term investors who do not mind waiting patiently, MIT is the typical "slow and steady" REIT which grows its distribution yield and net asset value gradually overtime backed by a solid Singapore government affiliated Temasek Holdings.
Is rights issue price $2.64 or $2.57?
ReplyDeleteHi, it's at S$2.64 as per the announcement (pls see screenshot) in the post).
DeleteWhat should I do if my holding is with SRS? I subscribe thru' them?
ReplyDeleteYes, your SRS with the local banks right? Need to go through them. Some still using snail mail. If through snail mail, sometimes it may arrive late or one may open 1 day later and then missed the entire rights issue cut off deadline at the discounted price. So be sure to give their hotline a call if you want to be sure.
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