Mapletree Industrial Trust reports fiscal 2Q net property income rose 13 percent

Mapletree Industrial Trust property at 18 Tai Seng in SingaporeMapletree Industrial Trust property at 18 Tai Seng in Singapore

Mapletree Industrial Trust reported Tuesday its fiscal second quarter net property income rose 13.3 percent on-year to S$79.99 million on contributions from new projects at 18 Tai Seng, 30A Kallang Place and Mapletree Sunview 1.

Gross revenue for the quarter ended 30 September was S$101.87 million, up 10.5 percent on-year, the trust said in a filing to SGX.

The distribution per unit (DPU) for the quarter came in at 3.13 Singapore cents, up 4.0 percent from 3.01 Singapore cents in the year-ago quarter, even as the number of units increased by 16.7 percent on-year, the filing said.

Daiwa had forecast net property income of S$78.5 million on gross revenue of S$103.5 million, with a DPU of 3.09 Singapore cents.

“Contributions from the acquisitions and development projects are expected to underpin MIT’s steady growth profile,” Tham Kuo Wei, CEO of the manager, said in the statement.

“We have continued our shift towards higher-specification industrial space with the recent acquisition of 13 data centers in North America and the ongoing redevelopment of the Kolam Ayer 2 Cluster. These strategic initiatives will help in building a more resilient portfolio and delivering sustainable growth to unitholders,” Tham added.

The portfolio’s average occupancy during the fiscal second quarter was 90.5 percent, down from 90.8 percent in the preceding quarter, mainly on lower occupancies at the light industrial buildings and the stack-up/ramp-up buildings segments, the trust said. For the U.S. portfolio, the occupancy rate remained unchanged at 97.4 percent, the trust said.

The advanced distribution of 2.93 Singapore cents for the 1 July to 25 September period was paid to unitholders Monday before the issuance of new units in a private placement, with the 0.20 Singapore cent balance of the DPU for the quarter to be paid with the fiscal third quarter distribution, the trust said.

For the fiscal first half, Mapletree Industrial Trust reported net property income rose 12.8 percent on-year to S$157.91 million on gross revenue of S$201.45 million, up 9.7 percent on-year. The DPU for the fiscal first half was 6.23 Singapore cents, up 3.7 percent from 6.01 Singapore cents in the year-ago period even as the number of units increased 16.7 percent on-year, the filing said.

In its outlook, Mapletree Industrial Trust noted business optimism in Singapore has dropped in the last quarter of 2019 and economic growth has stumbled.

“The manufacturing and wholesale trade sectors are bracing for a downturn, as they are the most exposed to the heightened trade tensions between the United States and China,” the trust said.

It added that the tapering supply of competing industrial space in recent quarters may help stabilize market rents and occupancy rates.

But for the U.S., the trust noted the data center market is the largest and most established globally, with supply by net operational square feet and demand by net utilized square feet  expected to increased at a compound annual growth rate of 4.6 percent and 6.5 percent respectively.

Mapletree Industrial Trust’s portfolio includes 87 industrial properties in Singapore and a 40 percent interest in 14 data centers in the U.S.

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