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Learn About Mapletree Industrial Trust Through These 3 Slides

Credit: Axisadman

Mapletree Industrial Trust  (SGX: ME8U) has been one of the best long-term performers amongst the billion-dollar real estate stocks in Singapore.

As it name implies, the real estate investment trust (REIT) focuses on the industrial property sector. As of 31 March 2016, it has 85 properties in its portfolio that are valued at $3.6 billion.

In early March, Mapletree Industrial Trust posted a slide deck it had used for an investor presentation. It contained slides that helps investors familiarise themselves with the REIT. Here are three.

The overview

In the slide below, Mapletree Industrial Trust provided an overview of its business:

2017-04-07 Mapletree Industrial Trust Overview
Source: Mapletree Industrial Trust’s investor presentation

Mapletree Investments Pte. Ltd. is the REIT’s sponsor and a major unitholder with a stake of 34.2%. As mentioned earlier, Mapletree Industrial Trust has 85 properties under its umbrella. The properties are spread out across Singapore.

Although Mapletree Industrial Trust focuses on industrial properties, not all of its properties are the same, as the next slide shows.

The different flavours of industrial buildings

There are many different types of industrial real estate within Mapletree Industrial Trust’s portfolio.

2017-04-07 Mapletree Industrial Trust Property Type
Source: Mapletree Industrial Trust’s investor presentation

The largest piece of the REIT’s portfolio in terms of value would be flatted factories (a 44% piece of the pie). These are high-rise, multi-tenanted buildings with basic facilities and are targeted for light manufacturing activities.

Next up, hi-tech buildings occupy almost a quarter of the value of Mapletree Industrial Trust’s portfolio. These buildings are utilized by technology and knowledge-intensive sectors and have a higher office-component to them. Meanwhile, business park buildings, which contribute 15.8% to the portfolio’s value, can serve as regional headquarters for multinational firms or for research and development.

Stack-up/ramp up buildings account for 12.6% of the portfolio’s value. This style of properties serve factories with the need for vehicular access to upper floors. Tenants typically include manufacturing and assembly firms. Elsewhere, light industrial buildings make up the smallest piece of Mapletree Industrial Trust’s portfolio at just 2.7%. These buildings are multi-storey developments that are usually occupied by an anchor tenant involved with light manufacturing.

Rental rates

The slide below provides some insight on the gross rental rates for the different types of buildings owned by Mapletree Industrial Trust.

2017-04-07 Mapletree Industrial Trust Rental Rate
Source: Mapletree Industrial Trust’s investor presentation

For instance, flatted factories commanded a rental rate of $1.71 per square foot per month (psf/month) for its new leases signed in the third quarter of the financial year ended 31 March 2017 (FY16/17). In contrast, hi-tech buildings and business park buildings secured rates of $4.04 psf/month and $2.95 psf/month, respectively, for new leases during the same quarter. Noticeably, new lease rates for the business park buildings appear to be much lower compared to prior rates.

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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.