REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Friday, October 28, 2022

Mapletree Industrial Trust Review @ 28 October 2022

Basic Profile & Key Statistics
  • Main Sector(s): Industrial & Office
  • Country(s) with Assets: Singapore, United States & Canada
  • No. of Properties (exclude development/associate/fund): 141

Key Indicators

Performance Highlight
Gross revenue and NPI improved yoy mainly due to contributions from the 29 US data centers that were acquired in July 2021. The amount available for distribution improved slightly however DPU declined slightly yoy. 

Rental Reversion
Besides light industrial buildings, the renewal rental rates are similar before and after renewal. Whereas for new leases, the rental rate for business park buildings is higher than the passing rent, while it is similar for flatted factories and ramp-up buildings.  


The redevelopment of Kolam Ayer 2 is expected to be completed in phases where 165 Kallang Way by this year while 163 (delayed from 2H2022) &161 Kallang Way to be in 1H2023. 

Asset Enhancement Initiative

MIT targets to complete the installation of solar panels at 6 flatted factory clusters by this year-end.

Sensitivity to Interest Rate

For every 1% increase in interest rate, the DPU impact would be around 1.5%

Related Parties Shareholding

  • REIT sponsor's shareholding: ± 10% from median
  • REIT manager's shareholding: ± 10% from median
  • Directors of REIT manager's shareholding: Above median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE:  ± 10% from median
  • Highest lease expiry within 5 years: Below median for more than 20%. Falls in FY23/24
  • Weighted average land lease expiry: Below median for more than 20%

Debt Profile

  • Gearing ratio: ± 10% from median
  • Gearing ratio including perps: ± 10% from median
  • Cost of debt: ± 10% from median
  • Fixed rate debt %: ± 10% from median
  • Unsecured debt %: 100%
  • WADM: Above median for more than 20%
  • Highest debt maturity within 5 years: ± 10% from median; Falls in FY26/27
  • Interest coverage ratio: Above median for more than 20%

Diversification Profile

  • Top geographical contribution: ± 10% from median
  • Top property contribution: Below median for more than 20%
  • Top 5 properties' contribution: Below median for more than 20%
  • Top tenant contribution: Below median for more than 20%
  • Top 10 tenants' contribution: Below median for more than 20%

Key Financial Metrics

  • Property yield: Above median for more than 20%
  • Management fees over distribution: ± 10% from median; $6.41 distribution for every dollar paid 
  • Distribution on capital: Above median for more than 20%
  • Distribution margin: ± 10% from median


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

Relative Valuation

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

Author's Opinion

 Favorable Less Favorable
Diversified SectorShort Weighed Average Land Lease Expiry
High Directors of REIT Manager's ShareholdingInterest Coverage Ratio Downtrend
Well Spread Lease ExpiryProperty Yield Downtrend
100% Unsecured DebtDistribution on Capital Downtrend
Long WADMDistribution Margin 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 
DPU Uptrend 
NAV per Unit Uptrend 
Occupancy Uptrend

Despite the increase in both gross revenue and distribution declared by the joint venture, the amount available for distribution and DPU are lower as compared to the previous quarter due to higher property expenses and borrowing expenses. Given both amount available for distribution and units in issue are similar yoy, let's do some checking.

Taking the amount available for distribution divided by units in issue for 2Q FY22/23 and 2Q FY21/22, DPU would be 3.29 cents for 2Q FY22/23 and 3.32 cents for 2Q FY21/22. The difference should be only 0.03 cents instead of 0.13 cents difference as in the statement. Next, let's check out the actual 2Q FY21/22 distribution to unitholders from the statement of 3Q FY21/22.

Both cashflow and unitholders fund movement showed distribution to unitholders is actually S$ 92,291,000 instead of S$ 88,377,000. Now, take S$ 92,291,000 divided by 2,659,699 units in issue, and there, we get 3.47 cents DPU, as declared in 2Q FY21/22.

From the footnote, S$ 15.7 million would be distributed over 8 quarters, but it never mentions "evenly". Therefore I think that the yoy decline in DPU could probably be due to lower divestment gain distribution in this quarter as compared to the previous year.

Another thing to take note, the manager would release S$6.6 million over the next three quarters to mitigate the impact of rising operating and borrowing costs. Assuming distributed evenly with similar units in issue, there would be 0.08 cents each quarter.

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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