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3 Key Things to Know About Mapletree Industrial Trust

Credit: Axisadman

Mapletree Industrial REIT (SGX: ME8U) has been one of the best performing billion dollar real estate stocks over the past five years.

As it name implies, the REIT focuses on the industrial sector and has 85 properties in its portfolio ( (all located in Singapore) that are valued at $3.6 billion, as of 31 March 2016 . A recent investor presentation shared more information about the real estate investment trust (REIT).

From the slide deck, I picked out three slides to help us understand the business of Mapletree Industrial Trust.

A many shades of industrial buildings

2016-11-15-mapletree-industrial-trust-property

Source: Mapletree Industrial Trust’s investor presentation

It turns out that the word “industrial” has a broad meaning.

Mapletree Industrial Trust segments its buildings into five main categories, namely flatted factories, stack-up and ramp buildings, hi-tech buildings, light industrial buildings and business park buildings.  

Each type of property fits different customer needs.

For instance, business parks is more suited for regional headquarters and research and development work. Elsewhere, stack up and ramp up buildings are better for companies doing manufacturing or assembly work.

Rental rates are not the same

Different buildings also command different rental rates.

2016-11-15-mapletree-industrial-trust-rental-rates

Source: Mapletree Industrial Trust’s investor presentation

The graph above shows the rental revision among the different property classes.

However, if we look at the rental rates for each segment, we can see that Mapletree Industrial Trust is able to charge very different rates for different properties. New leases for the business park can be as high as $3.94 per square feet (psf) per month. Comparatively, stack up and ramp up buildings only yields about $1.15 psf per month.

Broad customer base

2016-11-15-mapletree-industrial-trust-customers

Source: Mapletree Industrial Trust’s investor presentation

With the REIT’s diverse offerings comes a diverse customer base.

Customers include big companies such as data center provider Equinix , India’s TATA motors, computer manufacturer Dell and medical and pharma giant Johnson & Johnson . Despite its size, the top 10 customers we see above only account for around 17.3% of its gross rental income.  

In all, Mapletree Industrial Trust houses over 2,000 tenants under its umbrella.

For more on Mapletree Industrial Trust, go here .

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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 doesn’t own shares in any companies mentioned.