Mapletree Industrial Trust Review @ 2 August 2023

Basic Profile & Key Statistics

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

Key Indicators

Performance Highlight

Gross revenue and NPI improve slightly YoY. However, the amount available for distribution declined Yoy mainly due combination of higher borrowing costs and a higher amount of management fees elected in cash. This resulted in a DPU decline, despite this quarter having a release of retention that was withheld in 4QFY19/20/

Rental Reversion

For renewal leases, besides business park buildings, all achieved higher rental rates. However, for the new leases, hi-tech buildings and business park buildings are having lower rates while flatted factories and stack-up buildings achieved higher rates. The weighted average rental revision rate is 5.3%.

Acquisition

The acquisition of a data centre in Osaka is expected to be completed in 3Q 2023.

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 10% 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: ± 10% from median
• 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: ± 10% from median; $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: ± 5% from median

DPU Breakdown

• TTM DPU Breakdown:
• 94.8% from Operation
• 1.5% from Management Fees Paid in Units
• 2.1% from Proceeds from Divestment
• 1.6% from Release of Retention/Capital

Trends

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

Relative Valuation

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

Author's Opinion

Favorable	Less Favorable
High Directors of REIT Manager's Shareholding	High Top Geographical Contribution
Well Spread Lease Expiry	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
DPU from Operation Uptrend
NAV per Unit Uptrend
Committed Occupancy Uptrend

Compared to the previous quarter, gross revenue and NPI remained steady. DPU has shown improvement, primarily driven by higher interest income, reduced borrowing costs, and lower other trust expenses, despite a decrease in joint venture distribution. However, it's worth noting that upcoming DPU might be impacted since there won't be any balance of distribution from divestment gain and distribution withheld. Let's see whether manager would opt to receive more fees in units in the coming quarters.

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 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 own findings and should not be considered as 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.