Mapletree Industrial Trust posts lower FY22/23 DPU due to enlarged unit base

MAPLETREE Industrial Trust (MIT) on Thursday (Apr 27) reported its Q4 FY22/23 results with higher gross revenue and net property income.

Gross revenue rose 4.3 per cent to S$171.1 million, from S$164.1 million in Q4 FY21/22. Net property income increased 3.8 per cent to S$128.9 million, from S$124.2 million.

Distributable income in the quarter fell 3.5 per cent to S$87.2 million from S$90.3 million. This was due to higher borrowing costs in the quarter compared to the previous year. As a result, distribution per unit for Q4 FY22/23 also dropped 4.6 per cent to S$0.0333 from S$0.0349.

For FY22/23 ended Mar 31, MIT reported a 12.3 per cent increase in gross revenue to S$684.9 million from S$610.1 million the year prior. Net property income also rose 9.7 per cent in the financial year to S$518 million, from S$472 million in FY 21/22.

The higher net property income was partially offset by higher borrowing costs and the manager’s fees. As a result, distributable income rose 1.6 per cent to S$356.6 million in FY22/23, from S$350.9 million in FY21/22.

Distribution per unit, however, fell 1.7 per cent to S$0.1357 from S$0.138 due to the enlarged unit base after the distribution reinvestment plan.

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“The challenging macroeconomic environment as well as headwinds from higher operating expenses and borrowing costs have affected MIT’s financial performance for the financial year,” said Tham Kuo Wei, chief executive officer of the manager.

Average overall portfolio occupancy fell to 94.9 per cent in Q4 FY22/23, from 95.7 per cent in Q3 FY22/23 due to lower average occupancy rate in the Singapore portfolio. This was because of an increase in leasable area after 161 and 163 Kallang Way completed redevelopment during the quarter.

The average occupancy rate for the North American portfolio has improved to 93.7 per cent in Q4 FY22/23, from 93.1 per cent in Q3 FY22/23.

The year ahead will see an increased risk to global financial stability driven by the banking crisis and geo-economic fragmentation. Property operating expenses and borrowing costs are also expected to continue pressuring distributions.

In Singapore, the outlook for local business is uncertain with rising interest rates, geopolitical tensions and vulnerabilities within the global financial system. These factors are expected to weigh on the business confidence in the coming months.

In North America, supply constraints in the data centre market are expected to keep an upward pressure on rents for the first half of 2023.

“With a strong balance sheet, we will focus on strengthening the portfolio through accretive acquisitions and developments, such as the Mapletree Hi-Tech Park @ Kallang Way. We will also explore opportunistic divestments in our portfolio-rebalancing efforts,” said Tham.

Units of MIT closed unchanged at S$2.38 on Thursday.