Mapletree Industrial Trust posts 6.6% drop in Q2 DPU to S$0.0297
Net property income falls 3.5% to S$119.8 million
[SINGAPORE] Mainboard-listed Mapletree Industrial Trust reported on Tuesday (Oct 27) distribution per unit of S$0.0297 for its second quarter ended Sep 30, some 6.6 per cent lower than the S$0.0318 for the corresponding quarter last year.
Gross revenue for the period was down 1.9 per cent at S$167 million compared with S$170.2 million in the year-ago period; while net property income dropped 3.5 per cent to S$119.8 million from S$124 million.
The manager of the real estate investment trust (Reit), in an evening bourse filing, attributed the fall in gross revenue and net property income to lower contribution from the North American portfolio; absence of income from the portfolio divestment of three industrial properties in Singapore; and yen depreciation against the Singapore dollar.
It noted that the decline was partially mitigated by higher revenue from new leases and renewals under its Singapore portfolio.
Property expenses for the quarter amounted to some S$47.3 million, up 2.4 per cent year-on-year from S$46.2 million.
All in, the amount available for distribution to unitholders for its second quarter stood at S$84.8 million, down from S$90.7 million in the corresponding quarter last year.
The distribution will be paid to unitholders on Dec 9.
Said the Reit manager’s chief executive Anand Tze Ming Chandran: “Amid persistent interest rate headwinds, with maturing interest rate swaps being repriced at higher rates, we remain focused on progressing selective divestments and actively rebalancing the portfolio to strengthen its resilience.”
He noted that the Reit continues to advance its leasing and portfolio rejuvenation efforts.
SEE ALSO
Borrowing costs for the quarter declined 6.8 per cent year-on-year to S$20.2 million.
This was driven by the repayment of loans with proceeds from its Singapore portfolio divestment and lower interest on unhedged floating rate loans, partially offset by the impact of higher interest cost from repricing of matured interest rate swaps, said the manager.
Half-year performance
For its first half from Apr 1 to Sep 30, the Reit posted a distribution per unit of S$0.0608, down 5.7 per cent from S$0.0645 in the corresponding half-year period a year before.
Gross revenue fell 4.8 per cent to S$329.3 million from S$346.1 million earlier; while net property income notched a 6.1 per cent drop to S$242 million from S$257.7 million.
Accordingly, the amount available for distribution to unitholders in the first half of the financial year stood at S$173.6 million, compared with S$184 million in the year-ago period.
Quarter’s portfolio update
The Reit’s average overall portfolio occupancy in the second quarter stood at 89.7 per cent, a shade bleaker than the 90.7 per cent in the preceding quarter.
This reflected healthy occupancies in Singapore and Japan, partly offset by lower occupancy in North America due to the full quarter impact of the non-renewal of lease at 7337 Trade Street in San Diego, California, said the manager in a press release.
In Singapore, renewal leases across all property segments had positive rental reversions, with the weighted average rental reversion rate improving to 6.9 per cent in the quarter from 5.3 per cent in the previous quarter.
Quarter’s capital management update
Some 90.8 per cent of its amount available for distribution in the next 12 months is hedged into or derived in the Singapore dollar, said the manager.
About 72.7 per cent of the Reit’s total borrowings, including its proportionate share of joint ventures, as at Sep 30, is said to be hedged into fixed rates to manage the exposure to interest-rate risk.
Its aggregate leverage ratio of 37.7 per cent offers sufficient debt headroom to pursue new investment opportunities, added its manager.
Outlook
Looking ahead, downside risks such as further escalation in the Middle East conflict and renewed trade tensions, continue to weigh on the outlook, noted the manager.
Near-term performance of the Reit will be affected by previously announced non-renewal of leases in North America and higher borrowing costs due to the repricing of maturing interest rate swaps previously locked in at lower rates, it added.
It maintained that the trust’s portfolio remains resilient, supported by the stability of its Singapore and Japan assets as well as its North America portfolio’s long weighted average lease to expiry of 6.7 years.
Progress in its targeted divestments in North America is said to enhance financial flexibility and the manager’s ability to redeploy capital into investment opportunities across a broader range of industrial and data-centre sectors.
Its units ended Tuesday flat at S$1.79 before the announcement of its results.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
