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3 Things Mapletree Logistics Trust’s Management Wants You To Know About The REIT’s Business

Mapletree Logistics Trust (SGX: M44U), or MLT, is a real estate investment trust (REIT) that owns 134 logistics properties around Asia and Australia. The manager of MLT 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 latest results

Source: Mapletree Logistic Trust Results Presentation

The above is a summary of MLT’s latest quarterly earnings update. Overall, we can see that all metrics came in ahead of the same period last year. The stronger performance was mainly driven by growth from the existing portfolio as well as contributions from its two new acquisitions in Hong Kong.

As of 30 June 2018, the REIT’s gearing stood at 36.4% while its committed occupancy rate stood at 97.1%.

The REIT’s occupancy breakdown by geography

Source: Mapletree Logistic Trust Results Presentation

Above is a quick summary of MLT’s occupancy rate by geography.

Overall, we can see that occupancy rate for MLT’s portfolio declined slightly from 96.6% to 95.7%. This was mainly due to the lower occupancy rate in China as a result of the newly acquired properties (which are 84.8% occupied as some properties were newly completed). Nevertheless, the committed occupancy rate for China (new leases commencing in July-August 2018) was 97.8% while MLT total portfolio’s committed occupancy rate was 97.1%, as mentioned earlier.

MLT’s lease expiry profile

Source: Mapletree Logistic Trust Results Presentation

Here, there are two points worth mentioning. First of all, MLT’s portfolio weighted average lease to expiry was 3.3 years by net lettable area, as at 30 June 2018. Secondly, the staggered nature of MLT’s lease expiry profile will reduce the REIT’s pressure in renewing its leases in any particular year. With about 40% of its leases to expire after FY21/22, the REIT should have reasonable visibility of earnings for the next three to five years.

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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.