MENU

3 Things You Should Know From Mapletree Logistics Trust’s Management About Its Business Conditions

Credit: Axisadman

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.

The Manager of Mapletree Logistics Trust had given a presentation on the REIT’s latest results. In the presentation deck, I saw three slides on the REIT’s business that I think investors should pay attention to.

The first slide shows a high-level summary of Mapletree Logistics Trust’s income statement for the third quarter of FY17/18:


Source: Mapletree Logistics Trust FY17/18 third quarter earnings presentation

We can see that Mapletree Logistics Trust had a pretty good quarter, with growth in gross revenue, net property income, and distribution per unit (DPU). The improvement in the REIT’s results was due to a stable performance from its existing properties, and new contributions from accretive acquisitions.

The next slide that I want to look at shows the REIT’s geographical diversification:


Source: Mapletree Logistics Trust FY17/18 third quarter earnings presentation

No single country accounted for more than 34.8% of the REIT’s revenue in the third quarter of FY17/18. But, the REIT’s business is still concentrated mainly in the Asia-Pacific region, with Singapore, Japan, and Hong Kong accounting for 70.6% of its revenue.

The last slide I want to talk about illustrates Mapletree Logistics Trust’s lease expiry profile:


Source: Mapletree Logistics Trust FY17/18 third quarter earnings presentation

The lease expiry profile of a REIT is important, as it can give us clues on the stability of a REIT’s rental income.

One positive takeaway from the chart above is that Mapletree Logistics Trust’s leases will expire in a staggered manner. This will reduce the pressure on the REIT of having to renew a large chunk of its leases in one particular year. What’s more, with 35.1% of the REIT’s leases expiring after FY20/21, the REIT has some form of stability in its rental income over the next few years.

We believe we’ve identified a REIT dividend dynamo whose financials are strong enough to qualify its dividend as “safe” – and have profiled this stock in a research report that’s now available to download completely free of charge. Simply click here to claim your copy today!

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.