Mapletree Industrial Trust Review @ 11 May 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): 143

Performance Highlight

Gross revenue, NPI, distributable income, and DPU increased yoy mainly due to contributions from the 29 data centres acquired in Jul 2021 and the data centre in Virginia acquired in Mar 2021.

Rental Reversion

The rental rate for renewal leases is more or less the same as before renewal for all types of buildings. Whereas for new leases, the rental rate is similar to passing rent for business parks and ramp-up buildings, slightly lower for flatted factories but significantly lower for hi-tech buildings.

Development

The redevelopment of Kolam Ayer 2 is expecte1d to be completed in phases where 163 & 165 Kallang Way in 2H2022 and 161 Kallang Way in 1H2023.

Divestment

MIT completed the divestment of 19 Changi South Street 1 in April, which contributed to 0.07% of gross revenue.

Asset Enhancement Initiative

MIT has installed solar panels on the rooftop of Serangoon North Cluster and K&S Corporate HQ in FY20/21. Moving forward, MIT would continue to install solar panels at flatted factories. All these could help to lower the impact of electricity cost increase.

Related Parties Shareholding

• REIT sponsor's shareholding: ± 10% from median
• REIT manager's shareholding: Below median for more than 10%
• 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: ± 10% from median Falls in FY23/24
• Weighted average land lease expiry: Below median for more than 20%

Debt Profile

• Gearing ratio: ± 10% from median
• Cost of debt: ± 10% from median
• Fixed rate debt %: ± 10% from median
• Unsecured debt %: 100% Unsecured Debt
• 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: Above median for more than 10%
• 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; $6.54 distribution for every dollar paid 
• Distribution on capital: Above median for more than 20%
• Distribution margin: Above median for more than 10%

Trends

• Uptrend: DPU, NAV per Unit
• Slight Downtrend: 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 +1SD for 3y; Average for 5y

Author's Opinion

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

MIT continues to deliver good results with growth in income and DPU. Some positive notes would be occupancy has improved slightly from 93.6% to 94% and the gearing has reduced due to property valuation gain. However, fixed-rate debt % has reduced from 79.7% to 70.5% in the latest 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

And you could join the following to support my work:

Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

REIT-TIREMENT Patreon - Support my work and get exclusive contents

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic

*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.