US data centre contribution boosts MIT's Q3 DPU

THE consolidation of revenue from 14 data centres in the United States boosted Mapletree Industrial Trust's (MIT) third-quarter results.

This was partly offset by rental reliefs extended to tenants and the loss of revenue from the redevelopment of its flatted factories in its Kolam Ayer 2 cluster to new hi-tech buildings.

The manager of MIT said it has continued to support its tenants, especially small and medium-sized enterprises affected by supply chain disruptions and a fall in business volume as a result of the pandemic.

As at end-December 2020, it had given rental relief of about S$9 million to tenants over the first three quarters of FY21, with additional rental relief to be given in Q4.

This comprises the Covid-19 Assistance and Relief Programme and mandated rental reliefs under the Covid-19 (Temporary Measures) Act 2020. "This will affect MIT's distributable income for FY20/21," the manager said.

For the quarter ended Dec 31, 2020, the industrial landlord declared a distribution per unit (DPU) of 3.28 Singapore cents, compared to the 3.16 cents paid out a year ago. This will be paid on March 8, 2021; its books close on Feb 8, 2021.

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Gross revenue rose 20.5 per cent to S$123.7 million, while net property income rose 20.8 per cent to S$98.9 million. Distributable income added 16.8 per cent to S$81.1 million.

For the nine-month period, its DPU dipped to 9.25 Singapore cents, from 9.39 Singapore cents paid out a year ago, mainly due to S$7.1 million (equivalent to DPU of 0.32 cent) withheld by the Reit.

Nine-month gross revenue rose 7.3 per cent to S$326.1 million, while net property income added 8.1 per cent to S$259.2 million and distributable income was 14.4 per cent higher at S$224.5 million.

CEO of the manager Tham Kuo Wei said the Reit will continue to grow its data centres and high-tech buildings through strategic acquisitions and developments to enhance portfolio resilience.

The Reit's average overall portfolio occupancy increased to 93.1 per cent in Q3, from 92.3 per cent in the preceding quarter, mainly due to improved occupancy rates at its flatted factories.

The average rental rate of the Singapore portfolio also rose to S$2.11 per square foot (psf) per month in Q3, from S$2.03 psf per month in Q2, as all property segments registered higher average rental rates. This was mainly due to lower tenant rental reliefs given in Q3, compared to the preceding quarter.

The manager said that the Singapore industrial property market is expected to remain challenging in view of the uncertain economic recovery globally and in Singapore.

That said, strong demand is expected for high-quality data centre space in 2021, driven by 5G adoption, edge computing and the increasing trend of enterprise clients leveraging on hybrid information technology solutions to satisfy their remote working mandates.

The growth of demand drivers for data centres will however begin to plateau this year as the pressures created from the pandemic begins to subside, the manager said.

MIT's units added S$0.04 or 1.4 per cent to close at S$2.87 on Friday.