MapleTree – UOBKH

Completed rights issue…

MLT has completed a 3-for-4 rights issue at issue price of S$0.73. Sponsor Mapletree Investments has given an irrevocable undertaking to take up its entire allotment of rights units and will subscribe for all excess rights units not taken up by other unitholders. The rights issue involves issue of 831.1m new units and has raised S$606.7m. Mapletree Investments has increased its stake in MLT from 30.2% to 46.9% after taking up 325m excess rights units.

Impact from dilution. MLT plans to utilise proceeds from the rights issue to acquire 13 properties in Singapore (6), Malaysia (2), China (3), Japan (1) and South Korea (1) worth S$357.1m. Assuming the acquisition of these targeted properties is already completed, DPU for 1H08 will decrease by 25.6% to 2.93 cents. NAV/share at Jun 08 will be reduced from S$0.94 to S$0.84 and gearing from 56.3% to 36.8%.

Prefer A-REIT. Based on pro forma DPU of 2.93 cents, MLT is trading at annualised distribution yield of 8.1%. We prefer A-REIT due to a diversified portfolio and bluechip tenant base. AREIT provides FY09 distribution yield of 6.9%.