MapletreeInd - Goldman Sachs nudges up Mapletree Indus target, estimates

Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST
Research House: Golman Sachs

Goldman Sachs says Mapletree Industrial Trust’s (ME8U.SG) 3Q DPU of 1.52 cents (core DPU of 1.46 cents) was 4.0% above its estimate, “driven by higher occupancy and disciplined cost controls.” 

It says operating trends were healthy with its portfolio passing rents of $1.45 psf, +1.0% on-quarter. It says, highlights include:

1. its portfolio occupancy rose to 92.3% from 91.2% in 2Q, above its 91.5% estimate;


2. 22% average positive rental reversion;


3.  a tighter cost to income ratio of 28% 4) the rollout of AEI works on Redhill 2.

It adds “we expect MIT to focus organically to improve its still under-rented portfolio (21% below market), delivering sector leading organic growth of 8.6% DPU CAGR over FY10E-FY12E.” 

The house maintains its Neutral call on valuation; “it remains our preferred yield play with 6.7% FY10E and 7.1% FY11E, underpinned by an underlying stickiness in its tenant base”. 

It revises FY10E/FY11E DPU by +3.7%/+2.5% and raises its target to $1.15 from $1.12. REIT is up 0.9% at $1.10.