Mapletree Industrial Trust Review @ 1 November 2021

Basic Profile & Key Statistics

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

Performance Highlight

Gross revenue, NPI, distributable income and DPU increased YoY due to contributions from the 29 data centres that were acquired in Jul 2021 as well as contributions from the remaining 60% interest of 14 data centres that were acquired in Sep 2020.

Rental reversion for hi-tech buildings, flatted factories and stack-up buildings are slight negative. However, for new leases, the hi-tech buildings provided a lot higher rate than existing ones; while the rate is similar for flatted factories and lower for stack-up buildings.

The acquisition of 29 data centres in U.S. is completed on 22 Jul 2021. 

The developments of 161, 163 & 165 Kallang Way are ongoing with no changes in completion dates.

Related Parties Shareholding

• REIT sponsor's shareholding is moderate at 24.316%
• REIT manager's shareholding is moderate at 0.751%
• Directors of REIT manager's shareholding is moderate at 0.144%

Lease Profile

• Occupancy is moderate at 93.7%
• WALE is slightly long at 4.3 years
• Highest lease expiry within 5 years is low at 21.4% which falls in FY23/24
• Weighted average land lease expiry is short at 44.36 years

Debt Profile

• Gearing ratio is slightly high at 39.6%. Include perps, gearing is at 43.7%.
• Cost of debt is moderate at 2.4%
• Fixed rate debt % is low at 57.7%
• All debts are unsecured debts
• WADM is moderate at 2.9 years
• Highest debt maturity within 5 years is low at 18.1% which falls in FY25/26
• Interest coverage ratio is high at 6.2 times
• Preferred/perpetual securities over debt is moderate at 9.3%

Diversification Profile

• Top geographical contribution is high at 76.9% 
• Top property contribution is low at 9.6% 
• Top 5 properties contribution is low at 32.2% 
• Top tenant contribution is low  at 7.1% 
• Top 10 tenants contribution is low at 31.8%

Key Financial Metrics

• Property yield is high at 6.9%
• Management fees over distribution is slightly high at 14.4% in which unitholders receive S$ 6.94 for every dollar paid 
• Distribution on capital is high at 4.8%
• Distribution margin is high at 58.1%

Trends

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

Relative Valuation

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

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Short Weighted Average Land Lease Expiry
Well Spread Lease Expiry	Low Fixed Rate Debt
100% Unsecured Debt	High Top Geographical Contribution
Well Spread Debt Maturity	Interest Coverage Ratio Downtrend
High Interest Coverage Ratio	Distribution on Capital Downtrend
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

MIT has delivered a good performance again with increasing DPU YoY and QoQ. Moreover, from next quarter onward, the 29 data centres in U.S. would contribute full quarter income and would further improve the DPU. With more and more U.S. properties acquisition, MIT portfolio is getting more geographically diversified, where Singapore portfolio contributed around 60% of income at the latest quarter.

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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.