(13-04-2015, 02:20 PM)zerobeta Wrote: does anyone know why are they converting from single tenanted to multi tenanted? and why are the associated costs higher?
is this related to the new JTC subletting rules?
thanks
Yes... and contributing to this thread, my minutes of meeting @ MLT AGM, 14 July 2015, 230-430pm.
I was quite lazy to take down all the notes, so only recorded the points that I considered important.
Link to presentation:
http://infopub.sgx.com/Apps?A=COW_CorpAn...db5c328c76
On strategy:
- MLT attracts 11/20 of the top 3PL in the world and are keen to "follow the customer" in order to build portfolio in Asia Pan Pacific.
- Going forward, MLT will continue to Divest, Acquire and Recycle strategically. SG regulatory is much more challenging and MLT expects SG portfolio to be reduced proportionally over the years.
- MLT reassure that they take a measured manner to entering markets. MLT has not gone into Thailand, India, Indonesia and Philippines (yet) due to market conditions. (eg India, property ownership title laws are quite ambiguous and MLT feel this is a key risk for REIT in particular).
On Australia: There were a number of queries regarding MLT's maiden acquisition of Coles warehouse. Responses from mgmt:
- This is the only Coles warehouse to serve ALL Coles supermarket in NSW region. The blue chip tenant, long WALE of 19 yrs, yearly rental escalation contributed to the decision to acquire.
- Funding is mainly in AUD and cost of funding is projected at 3%.
- MLT is taking this as a basis to show potential AU opportunities of MLT's capabilities and hope to capture more quality logistics property in AU moving forward.
On Vietnam: MLT currently only has one logistics property in the portfolio. However, the sponsor has multiple properties in VN and they are still able to capture economies of scale.
On China:
- Central and Western China are the areas whre there is higher consumer consumption growth. Key challenges are lack of infrastructure to facilitate the growth. The local govt also are not so exposed to high quality logistic infra. Hence MLT takes effort to educate the govt officials.
- Competition is high in China. Not just GLP that is competing, but even local insurance companies and property developers are attempting to enter the logistics property industry in search of higher profit margins.
- MLT is selling a deep strategy to govt in the sense that they would be able to project with confidence, the type of high quality customers that would come in, the amount of jobs that can potentially be created, the quality of their logistics hub and efficiency, their growth potential. Key move is to not be other players who are looking at buying land as landbank, but to develop value for the areas they are entering in.
- China governments have also realised the need to diversify. They also look at awarding business by different types and nationality to reduce concentration risk.
A funny moment: 2 shareholders asked whether GLP is a threat, and also whether the SG government is controlling GLP and MLT business. Chairman Paul Ma: To assure, MLT is definitely not bound and can compete well with GLP. CEO Ng Kiat: Along the lines of - I may be smaller than (GLP CEO) Chee Meng, but I am no less aggressive!
An applause moment: 1 shareholder asked if MLT would adopt more transparency in the pay of CEO and directors. A long debate went, with CEO saying that she is not merely motivated by salary, but along with the rest of management, driven by a greater purpose. (Applause)
Chairman Ma: So I don't need to raise her salary next year...
Overall a well run AGM. I was quite comfortable with MLT and the AGM reinforced my positive opinion of the business.
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