Broker's take: OCBC Investment Research downgrades Mapletree Logistics Trust to 'hold'

Some 30 per cent of MLT’s gross rental income from CWT is contributed by third-party end users who have sub-lease agreements with CWT. In the event of a default, the Reit will be able to go directly to"the end users to negotiate fresh leases and mitigate any downtime".

Mr Wong said:"While this would mean a conversion from a master lease structure on a double-net basis to a multi-tenanted building structure, we believe MLT will be able to ‘gross up’ the rentals to take into account the property taxes and maintenance expenses, such that the overall net property income margin will remain similar."

However, the more complex undertaking would be finding a replacement for CWT, which acts is a third-party lease provider to end users under service agreements. The remaining 70 per cent of gross rental income from CWT is contributed through such arrangements. "If there is a rental default, MLT would have to find a replacement 3PL provider that matches the requirements and pricing of the end users," Mr Wong said.However, he added that there is likely to be limited near-term impact as CWT has not defaulted on its rental payments and there are no arrears due. MLT also holds security deposits of six months of rental in relation to the leases with CWT.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

OCBC seeking partner for China securities business[SINGAPORE] Oversea-Chinese Banking Corp (OCBC) is looking for a Chinese firm to team up with on a securities joint venture on the mainland, the latest foreign bank seeking to capitalise on the nation's financial-industry loosening. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »

Stocks to watch: Keppel Reit, Keppel Corp, Soilbuild Reit, Cache Logistics Trust, PECTHE following companies saw new developments that may affect trading of their shares on Thursday: Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »

Sharp drop in Singapore property investment sales in Q1; potential upside ahead: Colliers ResearchREAL estate investment sales across all property sectors in Singapore totalled S$5.3 billion in the first quarter this year, down 52 per cent on year due to weaker commercial and industrial volumes, according to Colliers International’s market research report released on Tuesday. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »