CIMB Research raised its target price for Mapletree Industrial Trust, which owns factories and other industrial assets, to $1.51 from $1.31 and kept its ’neutral’ rating, citing higher margins.
By 10:53 a.m., units of Mapletree Industrial were flat at $1.395, and have surged 30% since the start of the year, compared with the FTSE ST Real Estate Investment Trust’s 34% rise.
Mapletree Industrial said its distribution per unit for the second quarter was 2.29 cents, 11.7% 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 $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% from 2.5%.
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.
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