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3 Key Things Mapletree Industrial Trust Wants Investors to Know

Credit: Axisadman

Mapletree Industrial REIT (SGX: ME8U) has been one of the best performing billion-dollar real estate investment trusts 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 where Mapletree Industrial Trust’s management highlights its strengths.

A diverse customer base

In the slide below, Mapletree Industrial Trust highlights its strength in the diversity of its customers.  

2016-11-15-tenant-diversity-mapletree-industrial-trust

Source: Mapletree Industrial Trust’s investor presentation

Mapletree Industrial Trust further segmented its customers by industrial sector. According to the REIT, the biggest industrial sector represented less than 14% of the overall portfolio’s gross rental income.

In short, the REIT is highlighting that it does not have a high concentration in any one industrial sector.

Tenant Retention

Mapletree Industrial Trust has been quite adept at keeping its tenants.

2016-11-15-lease-tenure-mapletree-industrial-trust

Source: Mapletree Industrial Trust’s investor presentation

The graph above shows that over 60% of its tenants have stayed on with the REIT for more than four years, highlighting its ability to retain tenants for the long haul. Furthermore, Mapletree Industrial Trust has also been able to keep tenant retention in its hi-tech buildings and stack up and ramp up buildings at above 95% in its latest quarter.   

Higher retention could lead to better predictability of its revenue base. That in turn, could lead to sustainable distribution per unit (DPU) payouts.

Sponsorship has its privileges

2016-11-15-mapletree-industrial-trust-sponsor

Source: Mapletree Industrial Trust’s investor presentation

In this slide, Mapletree Industrial Trust highlights the sponsor that it is associated with. Mapletree, its sponsor, is a leading real estate development, investment and capital management company in the region.

Sponsorship has its privileges

The REIT highlights that its sponsor has a sizable portfolio worth S$34.7 billion with interests in logistics, industrial, residential, serviced apartments and student housing. Mapletree Industrial Trust is able to tap on its sponsor’s financial strength, market reach and network. Furthermore, the REIT will have the first right of refusal over the sponsor’s industrial or business park properties in Singapore.

Mapletree Industrial Trust also noted that its sponsor has a 34.2% stake in it.

To learn 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.