Mapletree Industrial Trust Review @ 5 November 2023

Basic Profile & Key Statistics

• Main Sector(s): Industrial
• Country(s) with Assets: Singapore, United States, Canada & Japan
• No. of Properties (exclude associate/fund): 142

Key Indicators

Performance Highlight

Gross revenue and NPI declined slightly YoY and the borrowing costs have increased YoY. However, the amount available for distribution and distribution to unitholders increased YoY due to a combination of higher distribution from joint venture and higher distribution from divestment proceeds, which include the distribution of compensation received for the compulsory acquisition of part of the land at 2 and 4 Loyang Lane in 2022 and the distribution of divestment gains from 65 Tech Park Crescent that was divested in 2017. However, DPU has declined YoY due to an enlarged unitholders base.

Rental Reversion

Positive rental reversion was achieved across all types of buildings with the weighted average rental reversion at 8.8%.

Acquisition

The acquisition of a data centre in Osaka has been completed on 28 September.

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 by 20% or more

Lease Profile

• Committed Occupancy: ± 5% from median
• WALE:  ± 10% from median
• Highest Lease Expiry within 5 Years: Below median by 20% or more. Falls in FY25/26
• Weighted Average Land Lease Expiry: ± 10% from median

Debt Profile

• Gearing Ratio: ± 10% from median
• Gearing Ratio including Perps: ± 10% from median
• Cost of Debt: Below median by 10% or more
• Fixed Rate Debt %: ± 10% from median
• Unsecured Debt %: 100%
• WADM: Above median by 20% or more
• Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY27/28
• Interest Coverage Ratio: Above median by 20% or more

Diversification Profile

• Top Geographical Contribution: Above median by 10% or more
• Top Property Contribution: Below median by 20% or more
• Top 5 Properties' Contribution: Below median by 20% or more
• Top Tenant Contribution: Below median by 20% or more
• Top 10 Tenants' Contribution: Below median by 10% or more

Key Financial Metrics

• Property Yield: Above median by 20% or more
• Management Fees over Operating Distributable Income: Above median by 10% or more; $5.92 distribution for every dollar paid 
• Operating Distributable Income on Capital: Above median by 20% or more
• Operating Distributable Income Margin: Above median by 10% or more
• Operating Distribution Proportion: Above median by 5% or more

DPU Breakdown

• TTM DPU Breakdown:
• 94.6% from Operation
• 1.5% from Management Fees Paid in Units
• 2.4% from Proceeds from Divestment
• 1.5% from Release of Retention/Capital

Trends

• Uptrend: NAV per Unit, Committed Occupancy
• Slight Uptrend: DPU from Operation
• Downtrend: Interest Coverage Ratio, Property Yield, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

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

Author's Opinion

Favorable	Less Favorable
High Directors of REIT Manager's Shareholding	High Top Geographical Contribution
Well Spread Lease Expiry	Non Competitive Management Fees
Low Cost of Debt	Interest Coverage Ratio Downtrend
100% Unsecured Debt	Property Yield Downtrend
Long WADM	Operating Distributable Income on Capital Downtrend
Well Spread Debt Maturity	Operating Distributable Income Margin Downtrend
High Interest Coverage Ratio
Low Top Property & Top 5 Properties' Contributions
Low Top Tenant & Top 10 Tenants' Contributions
High Property Yield
High Operating Distributable Income on Capital
High Operating Distributable Income Margin
High Operating Distribution Proportion
NAV per Unit Uptrend
Committed Occupancy Uptrend

The performance is similar as compared to the previous quarter. DPU is slightly lower due to the larger unitholder base from private placement but should improve in the coming quarters due to the full contribution from the newly acquired data centre in Osaka. However, DPU could poised for a slight decline in 4Q FY23/24 due to the end of distribution from the divestment of 65 Tech Park Crescent and part of the land at 2 and 4 Loyang Lane in the next quarter. For debts, there is only 3.2% require refinancing in the coming 12 months. And with a moderate fixed rate proportion of 79.2%, the interest costs should be stable in the near term.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.