SINGAPORE (April 27): Maybank Kim Eng is maintaining its “buy” call on Mapletree Industrial Trust (MINT) given its attractive forward yield.

In a Wednesday report, lead analyst Joshua Tan expects the coming year to be flat due to weak as weak leasing environment persists.

“For FY3/18-19, we look for robust DPU growth as supply tightens dramatically and new projects under development kick in,” says Tan.

Tan says FY16 was a “year of outperformance” for MINT although the leasing environment was challenging.

Growth was due to increases in year-average occupancy across all product types and with the addition of the build-to-suit data centre for Equinix.

“So it was a credit to management for achieving growth through occupancy under tough conditions,” adds Tan.

For FY3/17, Tan expects demand/supply conditions to be just as unfavourable, if not worse, than last year.

Instead, Tan advises investors to look forward to FY3/18-19 where supply is expected to be lean, especially for high-spec and business parks.

“We expect portfolio occupancy to increase in those years and for high-spec developments, Hewlett Packard-BTS and Kallang basin 4 to also start contributing,” says the analyst.

FY3/18-19 DPUs should see robust growth, even after factoring some drag from Johnson & Johnson possibly not renewing their lease in June 2018.

At 9.47, units of MINT are trading 0.61% lower at $1.63.