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Mapletree Industrial Trust: 3 Things Investors Should Know From Its Latest Earnings

Mapletree Industrial Trust (SGX: ME8U) is a real estate investment trust that focuses on the industrial property sector. It has 85 properties in its portfolio (all are in Singapore) that are collectively valued at S$3.78 billion, as of 30 September 2017.

In late October, the REIT reported its second quarter results for its financial year ending 31 March 2018 (FY17/18). The reporting period was from 1 July 2017 to 30 September 2017. Let’s take a look at three useful pieces of information investors may want to know from the announcement:

1. The overall result

The following table shows some important numbers from Mapletree Industrial Trust’s income statement for the second quarter of FY17/18:

Source: Mapletree Industrial Trust FY17/18 second quarter earnings press release

We can see that Mapletree Industrial Trust produced good growth in gross revenue, net property income, distributable income, and distribution per unit (DPU).

The REIT benefitted from revenue contributions from ae build-to-suit project for HP Singapore, and a pre-termination compensation of S$3.1 million from Johnson & Johnson.

2. The occupancy rate

The occupancy rate for a REIT is an important metric to look at since it gauges the strength of the market demand for the REIT’s properties. The following chart shows the occupancy rates for Mapletree Industrial Trust across its different property segments for the second and first quarters of FY17/18:

Source: Mapletree Industrial Trust FY17/18 second quarter earnings presentation

We can see that the REIT’s overall occupancy rate in the reporting quarter was lower compared to the previous sequential quarter. All of the REIT’s property segments – with the exception of Light Industrial Buildings – saw a sequential decline in their occupancy rates.

3. Growth in DPU

One of the main sources of return for investors in a REIT is the DPU. As such, it’s generally preferable to invest in a REIT that is able to grow its DPU over time. There’s no way we can predict the future, but a look at a REIT’s historical DPU can give us some perspective on what lies ahead.

Here’s a quick overview of Mapletree Industrial Trust’s DPU in since FY10/11:

Source: Mapletree Industrial Trust FY17/18 second quarter earnings presentation

Mapletree Industrial Trust has managed to grow its DPU steadily over the years. Compared to the second quarter of FY11/12, the REIT’s DPU in the reporting quarter has increased by 6.6% annually.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.