Mapletree Industrial Trust (SGX: ME8U), or MIT, has 86 industrial properties and 14 data centres in the US (through its 40% joint venture). There are two things about the REIT that investors may want to know about right now: its latest financial performance and valuation.
Here’s a table showing important items from MIT’s financial performance for the first quarter of its financial year ending March 2019 (FY18/19).
Source: Mapletree Industrial Trust’s Press Release
We can see that all metrics came in stronger in the quarter as compared to the same period last year.
The improvement in performance was due to income contribution from the built-to-suit project for HP Singapore, MIT’s 40% interest in the portfolio of 14 data centres in the United States, and early termination of leases, partially offset by lower occupancies across most property segments.
The REIT’s portfolio had an occupancy rate of 88.3% and a gearing ratio of 35% at end of the quarter. Overall, it was a stable performance from the REIT for the quarter.
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio and the distribution yield.
The table below shows Mapletree Industrial Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.
Source: SGX StockFacts and Google Finance; data as of 23 July 2018
We can see that MIT is trading at a premium to the market average due to its high PB ratio and low distribution yield.
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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. Motley Fool Singapore has a recommendation for Mapletree Industrial Trust.