10 Things Investors Should Know About Mapletree Industrial Trust’s Latest Earnings

Mapletree Industrial Trust (SGX: ME8U) is an industrial real estate investment trust (REIT) with a portfolio of 85 properties in Singapore.

Yesterday, the REIT announced its financial results for the second quarter ended 30 September 2017. The reporting period was from 1 July 2017 to 30 September 2017.

Here are 10 things to note from the latest earnings release:

1. Gross revenue for the quarter came in at S$92.6 million, up 9.9% year-on-year, while net property income (NPI) shot up 11.1% to S$70.7 million.

2. The growth in gross revenue and NPI were largely due to revenue contribution from a build-to-suit project for HP Singapore (Private) Limited and pre-termination compensation of S$3.1 million from Johnson & Johnson Pte Ltd. These were partially offset by lower portfolio occupancy.

3. Distributable income increased 6.8% to S$54 million.

4. The reporting quarter’s distribution per unit (DPU) was at 3.00 cents, up from 2.83 cents seen a year ago. The 6% year-on-year increase in DPU was mainly due to the pre-termination compensation. Excluding that, DPU for the quarter would have been flat as compared to the previous year.

5. The net asset value per unit was at S$1.41, as of 30 September 2017. In the first quarter, the figure came in at S$1.40.

6. As of 30 September 2017, the leverage ratio stood at 30%, up from 29.8% seen at the end of June 2017.

7. The average portfolio occupancy and passing rental rates for the quarter were 90.4% and S$1.94 per square foot per month respectively. In comparison, the figures were at 92.6% and S$1.95 per square foot per month respectively in the preceding quarter.

8. For the rest of the financial year, 8.4% of leases are due for renewal (by gross rental income), the bulk of which are for flatted factories.

9. Mapletree Industrial Trust will be co-investing in a portfolio of 14 data centres in the United States. Under the joint venture agreement, the REIT will hold a 40% interest in the unlisted single purpose trust, Mapletree Redwood Data Centre Trust, while the REIT’s sponsor will hold the remaining stake. The proposed acquisition, which will be around US$750 million, should be completed in the fourth quarter of this year.

10. Looking ahead, the REIT’s manager said, “The continued supply of competing industrial space and exit of tenants are expected to exert pressure on rental and occupancy rates”.

The trust’s units are now changing hands at S$1.96, giving a price-to-book ratio of 1.39 and a trailing distribution yield of 5.9%.

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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.