How Much Has Mapletree Logistics Trust Grown Since Its IPO?

Mapletree Logistics Trust (SGX: M44U), or MLT for short, is one of the older REITs in Singapore. It was listed way back in 2005 and has grown at an impressive rate from its initial portfolio of 15 Singapore-based logistics assets worth S$422 million to its current international portfolio of 127 properties with a total book value of S$5.5 billion.

That said, I wanted to find out by how much unitholder value has grown over that time. If its expansion was achieved merely through equity financing, without the accompaniment of organic income growth and appreciation of existing properties, then the impressive portfolio expansion would have done little to increase unitholder value.

To determine how much unitholders have been rewarded since its initial public offering (IPO), I will compare three important key performance indicators. They are: 1) the net asset value per unit; 2) net property income per unit; and 3) distribution per unit. The growth in these metrics will be more important to unitholders as it takes into account any unit dilution that may have occurred along the way.

Net asset value per unit

The net asset value (NAV) per unit is equivalent to the assets less any liabilities and divided by the total number of units. Mathematically, it can be represented by the following equation.

Net asset value per unit = ((Total assets – total liabilities))/number of outstanding units in existence)

On its listing date on 28 July 2005, MLT had a NAV per unit of S$0.56. Fast-forward to 31 March 2017, MLT had grown its NAV per unit to $1.04. That translates to a compounded annual growth (CAGR) of 5.29%.

Net property income per unit

The changes in net property income (NPI) per unit will reflect whether the trust has managed to grow its earnings capacity for existing unitholders. MLT’s NPI per unit has increased from 2.3 cents in 2005 to 10.2 cents in the last full financial year ended 31 March 2017. This is a CAGR of around 13.34%.

Distribution per unit

Perhaps of most important to REIT investors is whether the REIT can grow its distribution per unit (DPU) over time. A REIT’s ability to grow its DPU over the long-term is essential in generating excellent long-term returns for unitholders. Once again, MLT has performed well in this regard, increasing its DPU by a CAGR of 4.7% from 4.28 cents in 2015 to 7.44 cents for the full-year ended 31 March 2017.

The Foolish bottom line

The per unit information is certainly more useful than looking at a REIT’s overall performance as it takes into account any unit dilution that may have occurred during the period under study. From what we have seen, MLT has delivered a strong performance in all three aspects of its business, growing its NAV per unit, while increasing its earnings capacity and distribution per unit. This reflects the prudent use of capital and the management’s eye for strategic investments.

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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 Jeremy Chia doesn’t own shares in any companies mentioned.