Mapletree Logistics Trust fiscal 1Q net property income climbs 11.1 percent

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Mapletree Logistics Trust reported that net property income for its fiscal first quarter climbed 11.1 percent on-year to S$89.80 million, as the number of properties it held grew.

The fiscal first quarter ended 30 June started with 124 properties and ended with 134 properties, including a 50 percent interest in 11 properties, compared with 127 properties for the year-earlier quarter, the trust manager said in an SGX filing after the market close on Monday.

“These results reflect improved performance  from MLT’s existing portfolio as well as contributions from the recent two acquisitions in Hong Kong. Overall growth was partially offset by the absence of revenue from four divestments completed in FY17/18 and one divestment during the quarter,” it said.

In the quarter, leases for around 173,682 square meters were successfully renewed or replaced, out of 199,280 square meters due for expiry, for a success rate of 87 percent, it said.

The portfolio’s average rental reversion rate was positive at around 2 percent for the quarter, mainly on assets in China, Malaysia and Hong Kong, it said.

It noted that the portfolio occupancy rate fell to 95.7 percent by the end of the quarter, compared with 96.6 percent in the previous quarter, mainly due to a lower occupancy rate in China of 91.0 percent amid the recent acquisition of a 50 percent interest in 11 properties.

“Some of these properties are newly completed for which several committed leases have yet to commence. Including the committed
leases, the occupancy rate would be 97.8 percent for China and 97.1 percent for the MLT portfolio,” it said.

In its outlook statement, MLT sounded a cautious note.

“While the global economy continues on a steady expansionary path, downside risks have increased as the escalating trade tensions between major economies and rising interest rates may undermine global growth,” it said. “In the markets where MLT operates, demand for prime logistics space has remained stable, underpinned by domestic consumption and the growth of e-commerce.”

It noted that around 82 percent of the trust’s total debt has been hedged into fixed rates, withh around 73 percent of the income stream for the fiscal year has been hedged into or is denominated in Singapore dollars.

In early June, MLT declared an advanced distribution of 1.398 Singapore cents per unit for the 1 April to 4 June period, the filing noted. For the 5 June to 30 June period, MLT will pay a distribution of 0.559 Singapore cents per unit, it said.

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