Mapletree Industrial Trust’s third-largest tenant enters US court-supervised Chapter 11 process

MAPLETREE Industrial Trust’s (MIT) third-largest tenant has initiated a pre-arranged court-supervised process under Chapter 11 of the United States Bankruptcy Code, the trust’s manager announced in a bourse filing on Tuesday (Jun 6).

The tenant, a global co-location provider, said that it had received a commitment for US$200 million in debtor-in-possession financing and intended to pay vendors. 

The group occupies spaces in seven data centres held under the Mapletree Rosewood Data Centre Trust, a 50:50 joint venture between Mapletree Investments and MIT. 

As at Mar 31, 2023, it contributed about 3.2 per cent of MIT’s monthly gross rental income. 

MIT’s manager said that the tenant has met its rental obligations for April and partially fulfilled its rental obligations for May this year. The manager added that it would be pursuing the balance of the rental obligations for May. 

MIT’s manager said that MIT has “a large and well-diversified tenant base … that underpins the stability of its portfolio.” It added that it will continue to monitor the financial status of the tenant. 

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On Monday (Jun 5), the manager of Digital Core real estate investment trust : DCRU 0% (Reit) said that its second-largest tenant, also a global co-location provider, had filed for Chapter 11 bankruptcy protection.

It warned that the Reit’s distribution per unit (DPU) could be reduced by about US$0.02 if the annual revenue from the tenant was completely eliminated. Digital Core’s FY2022 DPU stood at US$0.0398.

Digital Core Reit’s manager did not name the tenant, but The Business Times reported that the troubled tenant is Cyxtera, a Nasdaq-listed data centre operator.

MIT’s manager did not name the tenant in question either. Both Digital Core and MIT’s tenants filed for Chapter 11 bankruptcy protection on the same day, Sunday (Jun 4), in New Jersey.

Digital Core Reit’s manager, like MIT’s manager, had also said that its customer had received a commitment for US$200 million in debtor-in-possession financing.

MIT’s units rose 0.5 per cent or S$0.01 to S$2.23 as at 11.25 AM on Monday after the announcement.