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What Investors Need to Know About Mapletree Logistics Trust’s Second Quarter Results

Mapletree Logistics Trust (SGX: M44U) posted a 5.8% year-on-year increase to S$81.5 million for its second quarter gross revenue. Meanwhile, net property income rose from S$66.6 million last year to S$68.7 million in the latest quarter, an increase of 3.1% year-on-year. This was announced on Monday after market closed.

The uptick in gross revenue increase was largely due to contributions from Mapletree Benoi Logistics Hub, two recent acquisitions in Malaysia and South Korea, and higher revenue from existing assets. However, revenue growth slightly declined due to lower occupancy at several newly converted multi-tenanted buildings in our shores, where the single-tenant master leases had expired. Portfolio occupancy declined from 97.6% last quarter to 97.2% in the latest quarter.

Distributable amount to unitholders went up 4% year-on-year to S$46.3 million while distribution per unit rose 3% to 1.88 Singapore cents. The units closed at S$1.195 on the day the results were released, translating to a trailing dividend yield of 6.3%.

As of 30 September 2014, gearing ratio at the trust stood at 33.3%. The average duration of debt was around 3.3 years while the weighted average borrowing cost was at 2.0%. In comparison, Cache Logistics Trust (SGX: K2LU), another logistics trust, had a gearing ratio of 28.9% as of end June this year. It will be releasing its third quarter results on 23 October.

Ms Ng Kiat, Chief Executive Officer of the Manager said, “This has been a busy period for MLT as we forged ahead in our expansion plans to deepen presence in our target growth markets such as China, South Korea and Malaysia. For the first half of the financial year, we had made four accretive acquisitions of about S$149 million. We hope to continue to strengthen our portfolio through more acquisitions and asset-enhancement initiatives. On the operational front, we expect to face some headwinds in our Singapore portfolio over the next 12 months as more properties are expected to be converted from single-tenanted buildings to multi-tenanted buildings. We will continue to focus on tenant-repositioning and retention.”

Going forward, in Singapore, some of the single-tenanted buildings is expected to be converted to multi-tenanted buildings. Portfolio occupancy will likely to be hampered during this period, while property expenses are expected to remain elevated. The manager will focus on active lease and asset management, and portfolio review during the transition.

The trust is currently going at 1.2 times its latest book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.