Mapletree Logistics Trust posts 3.5% rise in Q2 DPU to S$0.02248
THE manager of Mapletree Logistics Trust (MLT) on Tuesday (Oct 25) announced a 3.5 per cent increase in distribution per unit (DPU) to S$0.02248 for the second quarter ended September, from S$0.02173 in the corresponding period a year ago, despite an enlarged unit base.
The amount distributable to unitholders rose 15.6 per cent to S$108 million, driven by higher revenue from existing properties and contributions from accretive acquisitions completed in Q1 FY22/23 and in FY21/22.
Gross revenue climbed 11.4 per cent to S$183.9 million, while net property income was 10.8 per cent higher at S$160 million.
Overall growth was moderated by the depreciation of foreign currencies – including the Japanese yen and South Korean won – against the Singapore dollar.
The real estate investment trust (Reit) manager said that, at the distribution level, the impact of weakening currencies is mitigated through the use of foreign currency forward contracts to hedge the income from overseas assets.
MLT’s portfolio occupancy dipped marginally to 96.4 per cent as at end-September, from 96.8 per cent as at end-June.
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This was mainly attributable to lower occupancy in Singapore, due to the conversion of several single-user assets (SUAs) to multi-tenanted buildings (MTBs), which resulted in transitory downtime at these properties.
MLT saw a positive average rental reversion of 3.5 per cent for leases signed in Q2. As at Sep 30, the weighted average lease expiry (WALE) by net lettable area (NLA) stood at 3.3 years.
On the capital management front, MLT’s aggregate leverage ratio improved to 37 per cent as at end-September, from 37.2 per cent as at end-June.
Total debt outstanding decreased by S$96 million quarter on quarter to S$4.94 billion, mainly due to lower net translated loans attributable to the depreciation of the Japanese yen and Australian dollar against the Singapore dollar.
The weighted average borrowing cost stood at 2.5 per cent per annum for Q2, up from 2.3 per cent in Q1.
The Reit manager said its debt maturity profile remains “well-staggered” with an average debt duration of 3.6 years.
Some 82 per cent of MLT’s debt is hedged or drawn in fixed rates, with about 72 per cent of its income stream for the next 12 months hedged into Singapore dollars.
In addition, the manager guided that every potential 25 basis point increase in base interest rates may result in a S$0.0001 decline in DPU per quarter.
“My main challenge is not so much the interest rate environment,” Ng Kiat, chief executive officer of MLT’s manager, said in a briefing accompanying the results announcement. “In fact, banks are coming to us… because, in this very volatile climate, they would rather have blue-chip customers. So they are actually trying to get us to borrow more from them.”
“The one that is most difficult for us to control is the share price (and its impact on our cost of equity),” she added. “Our acquisition ability is hampered a lot more because of the cost of equity.”
Units of MLT have fallen 23.2 per cent in the year to date.
“MLT continued to deliver steady growth in DPU underpinned by our diversified portfolio. While overall occupancy rates have stayed resilient with positive rental reversions achieved for the quarter, we are mindful that market uncertainty has increased amid intensifying economic headwinds,” Ng said.
“We will continue to focus on maintaining portfolio stability while driving our portfolio rejuvenation strategy to strengthen MLT’s resilience.”
The distribution for Q2 will be paid on Dec 13, after the record date on Nov 2.
Units of MLT closed 2.1 per cent or S$0.03 higher at S$1.46 on Tuesday, before the results announcement.
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