COMPLETION OF ACQUISITION OF PUBLIC LORRY PARK SPACES OF GRANDTECH CENTRE AT NO. 8, ON PING STREET, SHATIN, NEW TERRITORIES, HONG KONG FOR HK$31.0 MILLION

1. Further to our announcement on 5 June 2007 on the completion of the acquisition of Grandtech Centre (excluding public lorry park spaces which will be completed upon the issuance of modification letter by the HKSAR Government) at No. 8 On Ping Street, Shatin New Territories, Hong Kong, Mapletree Logistics Trust Management Ltd., as manager of Mapletree Logistics Trust, is pleased to announce the completion of the acquisition of the public lorry park spaces of Grandtech Centre (the “Property”) today for a purchase price of HK$31.0 million, following the issuance of the modification letter by the HKSAR Government.

2. The purchase price and other acquisition costs of the Property are fully funded by debt.

Source : SGX

Downgrade on valuation

Announced S$181m worth of new acquisitions. Mapletree Logistics Trust (MLT) recently announced three further acquisitions for a total value of S$180.5m. Two of the assets are situated in Malaysia with the third located in Hong Kong. In terms of size, the Hong Kong property is larger, valuing at S$151.0m, while the Malaysian properties collectively make up
only about S$29.5m. This new set of acquisitions, together with those completed since its 1Q07 results, means that MLT asset size has increased to S$2.1b. Moreover at S$2.1b, MLT is ahead of its planned asset acquisition of S$1.0b per year or S$1.9b for FY07. Going forward, we do
not expect this pace of acquisition to relent anytime soon.

Expect 0.19-cent accretion. In 4Q06 MLT successfully raised fresh equity worth about S$349m with the issue of 296.822m new units at a weighted cost of S$1.176 per unit. With the new equity, MLT’s gearing has fallen back to about 40% range. More importantly, it means MLT has a total debt capacity worth S$300m. On that basis we see no issues with the debt
funding the latest acquisition. As for accretion, if we assume full debt funding, we expect the full year DPU accretion to be about 0.19 cent, or about 3% increase to our FY08F estimate. We have thus adjusted our forecasts accordingly, bumping up our FY07F and FY08F DPU from 6.2
cents and 6.5 cents to 6.3 cents and 6.7 cents, respectively.

Next markets in South Korea and Vietnam. Presently MLT has country/territory exposure in Singapore, Malaysia, China, Hong Kong and Japan. In 2H07 we expect it to enter more new markets, namely South Korea, Vietnam and possibly even India.

Downgrade to HOLD on valuation. MLT has done very well since our last report; appreciating from S$1.33 to last traded value of S$1.48, or over 11% within a month. However at present price, it is a stone’s throw from our fair value of S$1.50. More importantly, our valuation is based on a target asset size of S$4.0b while MLT’s present asset size is only S$2.1b.
So the market has obviously factored in future asset growth. At present valuation we would prefer to be cautious and let MLT catch up in terms of its pace of asset acquisition. We thus downgrade MLT purely on valuation grounds to HOLD but maintain our fair value of S$1.50.

MapletreeLog in HK$780m HK property deal

MAPLETREE Logistics Trust has signed a conditional deal to buy a Hong Kong commercial property for about HK$780 million, or S$151 million. The acquisition, which is expected to be completed by June next year, is yield-accretive and has a pro forma effect on MapletreeLog’s distribution per unit for the financial year ended Dec 2006 of an additional 0.16 Singapore cents per unit. The properties include various warehouse units and carpark spaces, and a procurement agreement for 95 public lorry park spaces at Grandtech Centre in Shatin, New Territories.

The area is ‘a key cargo hub for China-linked businesses’ with ‘quick access via key railways and expressways to the Chinese border and the container port’, said Chua Tiow Chye, chief executive of MapletreeLog. He said the acquisition will be one of the trust’s top three in terms of revenue contribution. When all announced deals are completed, MapletreeLog’s portfolio value will reach $2.2 billion, up from $1.4 billion at the end of 2006, it said.

MapletreeLog beats forecasts

MAPLETREE Logistics Trust (MLT), which owns warehouses and container depots in Singapore and abroad, said yesterday its distributable income for first-quarter 2007 grew 84.2 per cent to $15.3 million, from $8.3 million a year earlier.

The trust’s dividend per unit (DPU) rose 34.5 per cent to 1.48 cents, from 1.10 cents in Q1 2006. Distributable income was 8.5 per cent higher than forecast, while DPU was 7.2 per cent above the forecast. Net property income rose 128 per cent to $25.7 million.

Chua Tiow Chye, chief executive of MLT’s management team, attributed the performance to the 25 new properties acquired in the past year. The new acquisitions took the number of completed assets to 49 with a combined value of more than $1.5 billion.

Thirteen acquisitions are pending completion. Once they are completed, MLT will have 62 properties in its portfolio – 38 in Singapore, nine in Malaysia, six in Japan, six in Hong Kong and three in China.

Mr Chua said the trust is also exploring new markets such as Vietnam, India and South Korea. MLT hopes to have assets in Vietnam and South Korea by the end of this year. In India it has no assets lined up for acquisition and will work with its sponsor Mapletree Investments to build properties the trust can later acquire.

Right now, Singapore and Hong Kong together account for about 94 per cent of the trust’s gross revenue, with Japan, China and Malaysia making up the balance. Going forward, MLT expects more income contributions to come from Japan, China and Malaysia.

Mr Chua said the trust is confident of delivering its 5.69 cents DPU forecast this year on the back of a strong first quarter performance. MLT closed unchanged at $1.33 yesterday.