Good performance all round by Mapletree REITs

mapletree reit

The Mapletree family of REITs reported their year to 31 Mar 2018 results which were generally positive.

The following sums up the key points from the results presentations for each REIT.

Mapletree Logistics Trust (MLT)

MLT’s fourth quarter distribution per unit rose by 4%, on the back of organic growth, contributions from a newly-completed redevelopment in Singapore, as well as acquisitions.

For the three months ended March 31, gross revenue rose 11% from a year earlier to S$107.5m.

Net property income rose 14% to S$91.3m.

Overall growth was partially offset by the absence of contributions from four divestments and one of two blocks under redevelopment in Ouluo Logistics Centre, China.

Amount available for distribution to unitholders rose 27% compared to the same period last year to S$59.2m while DPU for the full year came up to 7.618 Singapore cents, a 2% increase from the previous year’s DPU of 7.44 Singapore cents.

Earlier in April 2018, the trust manger announced plans to acquire a 50% stake in each of 11 logistics properties in China for S$206m.

After the acquisition, MLT’s net lettable space in China will rise to 8.8m sqft. E-commerce revenue exposure will rise greatly from 18% to 42$.

In the portfolio to be acquired, the top 5 tenants are, Cainiao Smart Logistics Network, Sinotrans, Best Logistics Technology (China) and China Post Group Corporation.

The trust manager said that economic growth for the region is slated to be healthy. Demand for logistics properties is expected to remain healthy though trade tensions and faster-than-expected interest rate hikes may temper the expected growth.

Mapletree Commercial Trust (MCT)

For the quarter ended March 31, distribution per unit for MCT rose slightly to 2.27 Singapore cents from 2.26 Singapore cents.

The distribution will be paid on May 31 after the books are closed.

Gross revenue rose by 1.3% to S$108.9m from the same period last year while net property income rose 1.2% to S$84.3m.

The main contributor to the increases are from higher contributions from VivoCity and Mapletree Business City 1 in Alexandra from the effects of the step-up rents in existing leases.

Tempering the growth was lower occupancy at PSA Building and Mapletree Anson.

VivoCity’s sales inched up 0.7% to S$958.2m for the whole financial year. This was positive even on the back of a 1.4% fall in shopper traffic to 55m.

The entire portfolio achieved a 0.6% rental reversion in the year.

MCT’s manager expects the retail market to do relatively well this year on the back of an improved economic outlook. However, the benefits of growth will be uneven and not be enjoyed across all malls.

In the office space, the medium-term outlook is positive due to signs of improved business confidence and healthy pre-commitments from new office developments.

Mapletree Industrial Trust (MIT)

Distribution per unit for MIT rose strongly by 2.4% compared to the same period last year to 2.95 Singapore cents for the quarter ended March 31, 2018.

Gross revenue and net property income both rose by 2.9% each from a year ago to S$90.39m and S$67.88m respectively.

This came on the back of revenue contribution from the build-to-suit project for HP Singapore.

However, lower portfolio occupancies across all property segments (except light industrial buildings) tempered the growth.

On the back of the REIT’s acquisition of 14 data centres in the United States and the progressive completion of development projects in Singapore, the manager expects the portfolio to remain resilient and growth to continue its upward momentum.

Assets under management grew from S$3.75b as at March 31, 2017 to S$4.32b as at March 31, 2018.

The main contributor to the growth was the acquisition of a 40% stake in a portfolio of 14 data centres in the US and an increase of S$159.7m in its Singapore portfolio.

For the full fiscal year ended March 31, MIT’s distribution per unit rose 3.2% to 11.75 Singapore cents.

Full year gross revenue rose 6.7% to S$363.23m, mainly due to revenue contribution from HP and pre-termination compensation from Johnson & Johnson. This was partially offset by lower portfolio occupancy.

Full year net property income rose 8.1% to S$277.6m

Slightly marring the positive revenue growth rates was a fall in average portfolio occupancy. It stood at 90% during fiscal Q4, down from 90.5% in the preceding quarter.

The drag came from its Singapore industrial portfolio of 85 properties, where occupancy rate fell to 89.6% in fiscal Q4 from 90.1% in the preceding quarter.

The wider economy and business sentiment remains positive, but MIT’s manager sees some pressure on occupancy and rental rates given the impending large supply of completing industrial space.

The strategy remains to focus on tenant retention to maintain stable portfolio occupancy.


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