MLT – Nomura

First look

The deterioration in leasing markets now appears to be manifesting itself in MLT’s core property portfolio. 3Q09 results were characterised by a 2.3% q-q fall in gross property income, a 6.5% q-q rise in outgoings and a 3.5% q-q fall in net income as portfolio occupancy fell 1.2pp q-q to 97.1%. We expect lower rental growth expectations to impact capitalisation rates and valuations, and, ultimately, MLT’s book value of S$0.88/unit. REDUCE maintained, with a PT of S$0.48/unit.

Property income down 3.5% q-q