Mapletree Industrial Trust (SGX: ME8U), or MIT, is a Singapore-listed industrial REIT that has 87 industrial properties and 14 data centres in the US (through its 40% joint venture).
The Manager of MIT had given a presentation on the REIT’s latest results. Here’s a quick summary of three things that I particularly like from its latest earnings.
The first to like about MIT’s latest result is its strong performance across all its metrics. Here are some highlights.
For the quarter ended 30 June 2019, MIT’s gross revenue grew 8.8% year-on-year to S$99.6 million while net property income improved by 12.2% year-on-year to S$77.9 million. The improvement was primarily due to new revenue contributions from 18 Tai Seng, 30A Kallang Place and Mapletree Sunview 1. Similarly, the REIT’s distribution per unit (DPU) was up by 3.3% year-on-year to 3.10 cents.
In short, MIT continued its winning streak in delivering solid financial numbers. But there’s more to like about the REIT, which I’ll cover below.
Strong balance sheet
Source: Mapletree Industrial Trust’s results presentation
The above is a quick overview of MIT’s latest financial position. What’s useful to note here is that the weighted average tenor of debt remains relatively long at 4.2 years, which reduces the short term refinancing risk.
Moreover, its leverage ratio of 33.4% is a safe distance from the regulatory limit of 45%. This allows the REIT to acquire new assets without issuing new equity (which might dilute existing shareholders’ interest).
Tenant retention rate
Source: Mapletree Industrial Trust’s Result Presentation
The above slide shows a breakdown of long-staying tenants by the number of years. Here, what’s interesting to note is that 65.2% of the tenants have leased the properties for more than four years, with the latest retention rate at 77.8%.
Personally, these numbers are positive since they indicate that MIT has managed to retain its customers over the years. Going forward, if MIT can sustain its performance, it will likely keep its customer acquisition cost low while maintaining the REIT’s income stability over time.
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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. The Motley Fool Singapore has recommended the shares of Mapletree Industrial Trust.