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

Last week, Mapletree Logistics Trust (SGX: M44U) released its third quarter earnings update for its fiscal year ending 31 March 2018 (FY17/18). As a quick introduction, Mapletree Logistics Trust is a REIT with 124 logistics properties in many countries in the Asia Pacific region. These countries include Singapore, Hong Kong, Japan, Australia, China, Malaysia, South Korea and Vietnam.

Here are 10 things investors should know about Mapletree Logistics Trust’s latest results:

1. Gross revenue for the reporting quarter grew by 2.8% year-on-year to S$98.22 million while net property income improved by 3.9% to S$83.02 million.

2. The top-line growth flowed to the bottom-line, as the REIT’s distribution per unit (DPU) climbed by 2.0% to 1.907 cents. The 2.0% growth was achieved despite an increase in the REIT’s unit count from 2.5 billion a year ago to 3.057 billion.

3. Based on Mapletree Logistics Trust’s annualised DPU of 7.575 Singapore cents (from its DPU of 5.681 cents in the first nine months of FY17/18) and closing unit price of S$1.33 as of 29 January 2018, the REIT has a distribution yield of 5.7%.

4. As of 31 December 2017, the REIT’s gearing stood at 37.8%, which is some distance away from the regulatory gearing ceiling of 45%.

5. The REIT’s portfolio had a committed occupancy rate of 96.2% at the end of the reporting quarter.

6. The REIT achieved an average rental reversion rate of 2% in the reporting quarter, with contributions mainly from its Hong Kong and Vietnam portfolio.

7. The weighted average lease expiry for Mapletree Logistics Trust was 3.6 years by NLA (net lettable area), with 47.6% of its leases expiring by FY19/20.

8. As of 31 December 2017, single-user assets accounted for 35% of the REIT’s revenue. The remaining 65% came from multi-tenanted buildings.

9. So far in FY17/18, the REIT has sold Zama Centre in Japan (in July 2017), 4 Toh Tuck Link in Singapore (in September 2017), and Senai-UPS in Malaysia (in January 2018). 7 Tai Seng Drive in Singapore is also being sold by the REIT, with the transaction still pending completion. Mapletree Logistics Trust had been investing too; it completed the acquisition of Mapletree Logistis Hub Tsing Yi in Hong Kong in November 2017, and also bought a remaining 38% stake in Shatin No.3 in Hong Kong in January 2018.

10. In its earnings release, Mapletree Logistics Trust gave some insightful comments on the state of its market and business:

“The economic outlook for Asia is improving alongside the firming in global growth. As a portfolio, the Manager continues to see sustained leasing activities across its diversified markets supporting stable rental and occupancy rates. However, in Singapore, the market continues to face pressure from a high supply of warehouse space.

The Manager remains focused on maintaining high occupancy rates by actively managing leases due for renewal. After taking into account the expiring leases that have been replaced or renewed, the Manager is actively working on the balance of expiring leases representing 4% of the portfolio (by net lettable area).

In addition, the Manager continues to pursue opportunities for strategic acquisitions and asset enhancements to improve the quality of MLT’s portfolio.”

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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.