Worth a shot?
- Capitalise on trading opportunity with upgrade; BUY with TP at US$0.10
- MUST’s 4th largest tenant renewed and extended lease, but portfolio occupancy continues to trend down (-0.4ppt q-o-q)
- Key positives: i) Major tenants considering renewals/expansion; ii) Marc Feliciano (from sponsor) appointed board chairman
- Data to watch: i) Potential resolution with lenders, ii) lower occupancy, iii) decline in hedging ratio
Fourth largest tenant renewed and extended lease for another five years with strong positive reversions; portfolio occupancy continues to trend down while gearing remains relatively stable.
- Kilpatrick Townsend, MUST’s fourth largest tenant, has renewed their lease early and extend it by another five years to expire in 2030, following MUST’s commitment to a US$18m AEI, as previously announced. As such, we noted that MUST recorded strong rental reversions of +24% this quarter (9M23: +10%).
- However, portfolio occupancy continued to trend down, by 0.4ppt q-o-q to 84.7%.
- Gearing and unencumbered ratios remain relatively stable q-o-q, at 56% and 59.9%, respectively.
- Interest costs continued to inch up, by 0.3ppt q-o-q to 4.38%, and the interest coverage ratio declined to 2.4x vs. 2.6x in 2Q23.
- Hedging ratio has declined to 69% vs. 80% in 2Q23.
