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Wednesday, February 02, 2022

Mapletree Industrial Trust Review @ 2 February 2022

Basic Profile & Key Statistics

Mapletree Industrial Trust (MIT) invests in Business Park and Industrial properties, including Data Centers. MIT owns 143 roperties across Singapore, U.S. and Canada.

Performance Highlight

Gross revenue and NPI has improved YoY due to contribution from the 29 data centres which were acquired in Jul 2021 and the data centre in Virginia which was acquired in Mar 2021. In turn, this increase has been translate into improvement of distributable income and DPU.

Rental Reversion
Besides light industrial building which saw a 15% increase, rental rate for other buildings remain more or less the same. Rental rate is higher for new leases of hi-tech building and business parks while lower for flatted factories as compared to renewal leases.

Development

The redevelopment of Kolam Ayer 2 is in progress in where some castings are completed in different blocks. The expected completions date remain the same.

Divestment

MIT has announced for divestment for 19 Changi South Street 1 with sales price of S$ 13 mils. This divestment is expected to be completed in 1H 2022.

Related Parties Shareholding

  • REIT sponsor's shareholding is moderate at 24.311%
  • REIT manager's shareholding is low at 0.775%
  • Directors of REIT manager's shareholding is high at 0.144%

Lease Profile

  • Occupancy is moderate at 93.6%
  • WALE is moderate at 4.2 years
  • Highest lease expiry within 5 years is low at 21.6% which falls in FY23/24
  • Weighted average land lease expiry is short at 44.11 years

Debt Profile

  • Gearing ratio is slightly high at 39.9%. Include perps, gearing is at 43.9%.
  • Cost of debt is moderate at 2.3%
  • Fixed rate debt % is slightly high at 79.7%
  • All debts are unsecured debts
  • WADM is long at 3.5 years
  • Highest debt maturity within 5 years is low at 20.6% which falls in FY26/27
  • Interest coverage ratio is high at 5.9 times
  • Preferred/perpetual securities over debt is moderate at 9%

Diversification Profile

  • Top geographical contribution is high at 68.7% 
  • Top property contribution is low at 9.6% 
  • Top 5 properties contribution is low at 32.2% 
  • Top tenant contribution is low  at 6.7% 
  • Top 10 tenants contribution is low at 31%

Key Financial Metrics

  • Property yield is high at 6.7%
  • Management fees over distribution is slightly high at 15.1% in which unitholders receive S$ 6.62 for every dollar paid 
  • Distribution on capital is high at 4.6%
  • Distribution margin is high at 55.5%

Trends

  • Uptrend - DPU, NAV per Unit 
  • Flat - Distribution Margin 
  • Downtrend - Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

  • P/NAV - Below -1SD for 1y & 3y; Below average for 5y
  • Dividend Yield - Above +2SD for 1y; Above average for 3y; Average 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Manager's Shareholding
High Directors of REIT Manager's ShareholdingShort Weighted Average Land Lease Expiry
Well Spread Lease ExpiryHigh Top Geographical Contribution
100% Unsecured DebtInterest Coverage Ratio Downtrend
Long WADMProperty Yield Downtrend
Well Spread Debt MaturityDistribution on Capital Downtrend
High Interest Coverage Ratio 
Low Top Property & Top 5 Properties Contributions 
Low Top Tenant & Top 10 Tenants Contributions 
High Property Yield 
High Distribution on Capital 
High Distribution Margin 
DPU Uptrend 
NAV per Unit Uptrend

The performance has improved as compared to the previous quarters mainly due to the contribution from the 29 recently acquired data centres. MIT fundamental remains solid as well. However, its share price is currently at the 52 week low range, where its P/NAV is below historical average and dividend yield is above historical average.


You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts


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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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