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New revenue contributions boost MIT’s Q2

New revenue contributions from recently acquired, refurbished or completed properties led Mapletree Industrial Trust (MIT) to post a higher distribution per unit (DPU) of 3.13 Singapore cents for its second quarter, up from the 3.01 Singapore cents it paid out a year ago.

For the three months ended Sept 30, 2019, gross revenue rose 10.5 per cent to S$101.9 million, largely due to new revenue contributions from 18 Tai Seng, 30A Kallang Place and Mapletree Sunview 1.

As a result, the net property income in Q2 increased by 13.3 per cent to S$80 million.

Distributable income rose 12.1 per cent to S$63.5 million, mainly due to the higher net property income, but it was partially offset by higher manager’s management fees and borrowing costs.

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The higher manager’s management fees were due to better portfolio performance and increased value of assets under management, while the higher borrowing costs were mainly due to interest expense on debt borrowed to fund the acquisition of 18 Tai Seng, as well as interest costs related to 7 Tai Seng Drive upon obtaining its temporary occupation permit.

The average portfolio occupancy for Q2 was 90.5 per cent, lower than 90.8 per cent in the preceding quarter.

While the US portfolio occupancy rate stayed unchanged at 97.4 per cent, the Singapore portfolio occupancy fell marginally to 90.2 per cent, from 90.5 per cent in Q1, mainly due to the lower occupancies registered at its light industrial buildings and stack-up/ramp-up buildings segments.

Tham Kuo Wei, CEO of the manager, said: “Contributions from the acquisitions and development projects are expected to underpin MIT’s steady growth profile.

“We have continued our shift towards higher-specification industrial space with the recent acquisition of 13 data centres in North America and the ongoing redevelopment of the Kolam Ayer 2 Cluster. These strategic initiatives will help in building a more resilient portfolio and delivering sustainable growth to unitholders.”

Indeed, hi-tech buildings was the largest contributor, making up 40 per cent of MIT’s gross revenue and net property income in the first half of the fiscal year.

This was followed by flatted factories at 38 per cent.

The manager announced an advanced distribution of 2.93 cents per unit for the period from July 1, 2019 to Sept 25, 2019 to be paid to unitholders on Oct 21, 2019, while the balance DPU of 0.2 cent will be payable together with the third quarter distribution.

Units of the Reit closed five cents or 1.9 per cent lower at S$2.53.