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

In late January, Mapletree Industrial Trust (SGX: ME8U) released its third quarter results for its fiscal year ending 31 March 2018 (FY17/18). As a quick introduction, Mapletree Industrial Trust is a REIT with 85 industrial properties in Singapore, and 14 data centres in the US (through a 40%-owned joint venture).

Here are nine things investors should know about Mapletree Industrial Trust’s latest results:

1. Gross revenue for the reporting quarter grew 8.3% year-on-year to S$91.47 million while net property income jumped by 11.7% to S$70.86 million.

2. Similarly, the REIT’s distribution per unit (DPU) was up by 1.8% year-on-year to 2.88 cents.

3. Based on Mapletree Industrial Trust’s annualized DPU of 11.73 cents (calculated using its DPU of 8.80 cents for the first nine months of FY17/18) and its closing unit price of S$1.96 as of 7 February 2018, the REIT has a distribution yield of 6.0%.

4. As of 31 December 2017, the REIT’s gearing stood at 33.8%, which is a safe distance from the regulatory ceiling of 45%.

5. The REIT’s portfolio had a committed occupancy rate of 90.5% at end-2017.

6. The weighted average lease expiry (by gross rental income) was at 3.9 years as of 31 December 2017. 42.9% of the REIT’s leases will expire by FY19/20, 23.5% will expire in FY20/21, and the remaining 33.6% will expire after FY21/22.

7. Mapletree Industrial Trust has over 2,000 tenants as of 31 December 2017. The top 10 tenants of the REIT account for just 26% of its overall gross rental income.

8. The 14 data centres that Mapletree Industrial Trust owns were acquired in December 2017. The REIT had co-invested with its sponsor, Mapletree Investments Pte Ltd, which holds the other 60% ownership in the 14 data centres. Mapletree Industrial Trust has the right of first refusal to acquire the 60% stake.

9. In its earnings release, Mapletree Industrial Trust gave some comments on its outlook:

“Although the wider economy and business sentiment of the small and medium-sized enterprises are strengthening, possible downside risks in the external environment such as geopolitical risks and policy uncertainty could negatively affect the improvement in the business environment.

In addition, the continued supply of competing industrial space is expected to exert pressure on both occupancy and rental rates. The Manager will continue to focus on tenant retention to maintain a stable portfolio occupancy.

Economic expansion in the US is projected to continue in 2018, with continued support from private consumption and investment. According to 451 Research, the supply for US multi-tenant data centres (in net operational square feet) will grow by 9.0% while the demand will grow by 10.1% in 2018. This will underpin the stability of revenue contribution from the US 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.