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Mapletree Logistics Trust knocked the wind out of Cache Logistics Trust

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Amid the sea of red in the Singapore stock market, Mapletree Logistics Trust shares bucked the trend and stood out like a shining beacon. The bullish form of Mapletree Logistics Trust shares could be attributed to its recent $778 million acquisitions of five ramp-up logistics warehouses from CWT Pte Ltd.

The move by Mapletree Logistics Trust raised a lot of eyebrows because it was made against the backdrop of warehouses supply glut and falling rental prices in Singapore. According to 4Q2017 data released by JTC, the number of available warehouses increased quarterly by 2% to 10.4 million sqm while vacancy rate decreased slightly by 1.6%. Correspondingly, rental prices remained weak in 4Q2017, decreasing by 1.0%.

On the other hand, the mega deal also saw Mapletree Logistics Trust one-upped on local rival Cache Logistics Trust, a ramp-up logistics warehouse specialist. The latter’s competitive strength lies in ramp-up warehouses, which are limited in supply in Singapore because specialised planning and design specifications are required for such properties. The entry of Mapletree in this niche is an unwanted competition for Cache.

Mapletree Logistics Trust

Opportunistic acquisitions by Mapletree Logistics?

Investors of Cache Logistics Trust must have seen red with the acquisition. This is because all the five warehouses were previously under Cache’s Right of First Refusal granted by CWT. But then again, Cache Logistics Trust investors should have expected this coming their way when China’s HNA Group bought over its Sponsor CWT in late 2017.

Being debt-laden, HNA Group is reportedly in the midst of selling assets to pare down debts. And Temasek Holdings has wasted no time in snapping up the CWT properties in Singapore. Being 33.7% owned by Temasek Holdings, it is no surprising that Mapletree Logistic Trust would [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: July 13, 2018 — 2:49 am

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