Mapletree Industrial Trust (SGX: ME8U) has been one of the best performing real estate investment trusts (REITs) in Singapore’s stock market over the past three years. As its name suggests, the REIT focuses on the industrial sector and has 84 properties with a total value of $3.4 billion as of the end of March 2015. A recent investor presentation given by the REIT contained interesting and important information about it. I had captured eight key points from the presentation that are worth noting for investors. Here they are: Mapletree Industrial Trust’s sponsor is Mapletree Investments Pte. Ltd. (MIPL), which owns a little over…
As its name suggests, the REIT focuses on the industrial sector and has 84 properties with a total value of $3.4 billion as of the end of March 2015. A recent investor presentation given by the REIT contained interesting and important information about it.
I had captured eight key points from the presentation that are worth noting for investors. Here they are:
- Mapletree Industrial Trust’s sponsor is Mapletree Investments Pte. Ltd. (MIPL), which owns a little over a third of the REIT’s units. MIPL is also the 100% owner of the property manager for the REIT.
- As mentioned earlier, Mapletree Industrial Trust focuses on industrial properties. But, the REIT excludes properties that are mainly used for logistics purposes. It is possible that its peer, Mapletree Logistics Trust (SGX: M44U), is the one that’s focused on these excluded properties.
- Mapletree Industrial Trust divides its portfolio into five different types of properties. That would be flatted factories, stack-up/ramp up buildings, hi-tech buildings, light industrial buildings, and business park buildings. Each property type plays a different role. For instance, the stack-up/ramp up buildings feature vehicular access to upper floors. This could be suitable for manufacturing or assembly activities which require frequent movement of inventory.
- Flatted factories, which are suitable for light manufacturing activities, takes up almost 45% of the value of the REIT’s portfolio. On the other end, light industrial buildings make up less than 3% of the portfolio’s value.
- Mapletree Industrial Trust has been increasing its distribution per unit (DPU) since its initial public offering (IPO) on 21 October 2010. For context, the REIT had paid out a DPU of 8.41 cents in the financial year ended March 2012 (FY11/12). In the past twelve months, the REIT’s DPU is 11 cents, 31% higher than the DPU for FY11/12. In all, the REIT has logged in a total return, measured by capital gains and distributions, of 120.7% (as of 11 March 2016) since its IPO.
- The REIT has recorded a relatively steady operational performance over its lifetime. For instance, the occupancy rate of its portfolio has been kept above 90% since its IPO while its gross rental rate has increased from $1.45 per square foot per month in the third-quarter of FY10/11 to $1.89 per square foot per month in the third-quarter of FY15/16.
- Mapletree Industrial Trust has over 2,000 tenants in its portfolio. The customer base is also fairly diversified, with almost 40% coming from the manufacturing sector and 25% hailing from the wholesale retail and trade sector.
- The REIT also stated that over 60% of its tenants have leased its properties for more than four years, suggesting that the REIT has a strong customer retention rate. The weighted average lease expiry (by gross rental income) stood at 2.9 years at the end of 2015.
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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 Chin Hui Leong owns units in Mapletree Logistics Trust.