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Mapletree Logistics Trust Offers A 4% Yield And Geographical Diversification, But Limited Total Returns

Published Tue, 15 Sep 2020 09:06:51 -0400 on Seeking Alpha

Seeking AlphaREITs | SingaporeMapletree Logistics Trust Offers A 4% Yield And Geographical Diversification, But Limited Total ReturnsSep. 15, 2020 9:06 AM ET|| About: Mapletree Logistics Trust (MAPGF), Includes: MPCMFby: Nikolaos SismanisNikolaos Sismanis Long Only, Growth, Growth At Reasonable Price, long-term horizonSummarySingapore's REITs have achieved CAGR returns of 15% over the past decade, offering investors a fantastic combination of growth and income.
Mapletree Logistics Trust's portfolio of properties is highly diversified, strategically located near major expressways and key logistics clusters, across eight geographic markets in Asia.
MLT is able to borrow at extremely low rates, currently enjoying a cost of debt of around 2.3%.
MLT's growing 4% yield is quite attractive, but the stock's rally over the past few years limits an exceptional return potential for current investors.
Last November, I published an article on Mapletree Commercial Trust (OTCPK: MPCMF), a Singapore-based REIT with diversified operations in the real estate sector. In that article, I had highlighted the importance of diversification in income-oriented portfolios and why investors should keep an eye on international stocks.
Singapore, in particular, has become Asia's biggest REIT hub, having over 40 listed REITs that specialized in various real estate sub-sectors, such as logistics, data centers, malls, offices, and more. A key difference from the traditional U.S. REITs is that Singapore listed ones will usually own properties amongst multiple countries, offering adequate geographical diversification.
Taking advantage of Singapore's business-friendly environment, diversified property portfolios, and quite low borrowing rates, Singapore's REITs have achieved CAGR (compound annual growth rate) returns of 15% over the past decade, offering investors a fantastic combination of growth and income.
Source: reitas
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