Mapletree Industrial Trust to resume distribution reinvestment plan for Q2

MAPLETREE Industrial Trust's distribution reinvestment plan (DRP) will resume and apply to its distribution per unit (DPU) for its second quarter ended Sept 30. This means unitholders can choose to receive their distributions declared in the form of units or cash or a combination of both, so they can buy new units without incurring additional transaction-related costs.

"The issue of units in lieu of cash distributions under the DRP will strengthen MIT's balance sheet, help finance the progressive funding needs of the development projects and accord MIT greater financial flexibility to pursue growth opportunities," MIT said in its announcement on Tuesday. Unitholders can expect to receive their quarterly DPU in cash or DRP units by Dec 6, 2018.

The same evening, it announced that DPU for Q2 edged up to 3.01 Singapore cents from three Singapore cents in the previous year, while Q2 income available for distribution grew 4.9 per cent to S$56.7 million from the preceding year.

For the three months ended Sept 30, gross revenue dipped 0.4 per cent to S$92.2 million from the preceding year.

The decline in gross revenue had come from the pre-termination compensation in Q2 last year. Without this, gross revenue would have been higher this quarter by 3.1 per cent. Revenue was still helped by contribution from Phase 2 of the build-to-suit project for HP Singapore (Private) Limited and recently completed development projects.

Net property income dipped 0.1 per cent to S$70.6 million from the previous year.

But what helped distributable income were contributions from development projects and income contribution from MIT's 40 per cent interest in the portfolio of 14 data centres in the US. MIT's gross revenue and net property income do not include its interest in the data centre joint venture with Mapletree Investments as it is equity accounted.

Its properties also include 86 industrial properties in Singapore.

For the first half of the year, distribution per unit edged up to 6.01 Singapore cents from 5.92 Singapore cents in the year-ago period, as H1 income available for distribution expanded 6.2 per cent to S$113.6 million from the previous year.

For the six months ended Sept 30, gross revenue crept up 1.3 per cent to S$183.7 million from the year-ago period. Net property income crept up 0.8 per cent to S$140 million from the year-ago period.

Net asset value per unit as at the end of the second quarter was flat at S$1.48, compared to June 30. Its portfolio WALE by gross rental income stands at 3.7 years.

Average portfolio occupancy fell to 86.7 per cent in the second quarter from 88.3 per cent in the first quarter. Singapore portfolio occupancy fell from 87.8 per cent to 86.2 per cent as 7 Tai Seng Drive sees a scheduled termination of leases ahead of upgrades to be made. The US portfolio occupancy rate remained unchanged at 97.4 per cent.

"The imminent supply of new competing industrial space is expected to moderate both the market rents and occupancy rates. The Manager remains focused on tenant retention to maintain a stable portfolio occupancy," MIT said.

Meanwhile in the US, it noted a growing demand for data centre space.

MIT units ended unchanged at S$1.95 on Tuesday.