On 22 January 2025, Mapletree Industrial Trust (“MIT”) have announced their third quarter results for FY2025. Net property income saw a decrease this quarter, partially offset by a lower borrowing cost. This indicates that the DPU increase was due to adjustment for net effect of non-tax chargeable items and other adjustments. With a decrease in occupancy rates, investors will need to monitor if there are any downward pressures in DPU over the next few quarters.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Third Quarter Results
Photo source: https://fifthperson.com/2021-mapletree-industrial-trust-agm/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +1.2% | -1.7% |
| Rating | Favorable | Unfavorable |
DPU for the quarter ending 31 December 2024 increased by 1.2% to SGD0.0341 per unit compared to SGD0.0337 per unit in the previous quarter. This metric shifted towards Favorable.
Do note that the increase in DPU mainly arose from adjustment for net effect of non-tax chargeable items and other adjustments, as net property income saw a decrease this quarter, partially offset by the decrease in borrowing costs. The decrease in net property income was due to non-renewal of leases in certain clusters in Singapore and higher property maintenance costs for the Singapore clusters; partially offset by higher contribution from the newly acquired mixed-use facility in Tokyo.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 92.1% | 92.9% |
| Rating | Unfavorable | Neutral |
Occupancy rate as of 31 December 2024 have decreased to 92.1%. Noted that the decrease arose from the Singapore and North American portfolio. No further information was provided by management on the decrease. The metric shifted towards Unfavorable.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 39.8% | 39.1% |
| Rating | Neutral | Neutral |
Gearing ratio increased to 39.8% as of 31 December 2024. The metric remains Neutral, though it is close to the Unfavorable territory.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 4.3x | 4.3x |
| Rating | Favorable | Favorable |
The adjusted interest coverage for the trailing 12 months remains unchanged at 4.3 times as of 31 December 2024. Therefore, this metric remains Favorable as the coverage ratio is above my preferred coverage of 3.0 times.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.1 years | 3.4 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt shortened to 3.1 years as of 31 December 2024. This metric remains Favorable as there is still sufficient time to refinance their debts as they fall due. Do note that approximately 24% of their debt will mature in FY25/26.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.22 | 1.32 |
| Rating | Neutral | Unfavorable |
The Price to Book (“P/B”) ratio currently stands at 1.22 This is computed using the closing share price of SGD2.13 on 7 February 2025 and the net asset value per share of SGD1.74 as of 31 December 2024. The metric is Neutral as it is now cheaper than before to buy MIT, though the P/B ratio is on a higher side compared to other REITs.
As of 7 February 2025, the Market Capitalization is approximately SGD6,067 million.
Website: Yahoo Finance: Mapletree Industrial Trust (ME8U.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.60% | SGD 0.034 |
| 2024 | 6.35% | SGD 0.135 |
| 2023 | 6.31% | SGD 0.134 |
| 2022 | 6.49% | SGD 0.138 |
| 2021 | 6.29% | SGD 0.134 |
| 2020 | 5.72% | SGD 0.122 |
In the first quarter of the calendar year 2025, MIT is distributing SGD0.034 per unit of dividend. This amount is similar to the total payout of SGD0.135 per share for the calendar year 2024. With a closing share price of SGD2.13 as of 7 February 2025, this translates to a dividend yield of 6.35%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
In the event that the required dividend yield increases to 7.25% as a benchmark, based on the dividend of SGD0.135 MIT may see its share price drop by 12.6% to SGD1.86.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.13 | – |
| 7.25% | 1.86 | -12.6% |
| 8.25% | 1.64 | -23.2% |
Interest Rate Sensitivity
The Federal Reserve on 30 January 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%. This is due to significant uncertainty in the U.S. economic landscape, with a healthy set of macroeconomic fundamentals that have changed little in recent months, but coming decisions from the Trump administration on immigration, tariffs, taxes and other areas that could prove disruptive.
Website: Fed leaves rates unchanged, sees no hurry to cut again
MIT have provided the interest rate sensitivity analysis as below. Should the interest rate change by 1.0%, using distribution per quarter as a base, distribution is expected to change by 1.5%.
| Change in Interest Rates | Impact on amount available for distribution per quarter (SGD’000) | Impact on DPU (%) |
|---|---|---|
| 50 bps | $800 | 0.8% |
| 100 bps | $1,500 | 1.5% |
Other metrics
Tenant profile
MIT has an enlarged portfolio covering multiple trade sectors, with a well-diversified tenant profile of over 2,000 tenants and the top 10 customers as of 31 December 2024 accounted for 29.8% of MIT’s portfolio with no single tenant accounting for more than 5.9% during the period, providing income diversity to the portfolio.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +1.2% | Favorable |
| Occupancy | 92.1% | Unfavorable |
| Gearing Ratio | 39.8% | Neutral |
| Interest Coverage | 4.3x | Favorable |
| Debt Maturity Profile | 3.1 years | Favorable |
| Price to Book Ratio | 1.22 | Neutral |
| Overall | Neutral |
The overall metrics indicate that it remains Neutral to invest in MIT. While DPU saw an increase, it is worth noting that occupancy and gearing ratio has worsened slightly this quarter. Investors will need to monitor if there are any significant changes in their next update, which covers the entire financial year.
Background
MIT is a real estate investment trust listed on the Main Board of Singapore Exchange. The principal activity of MIT and its subsidiaries (the “Group”) is to invest in income-producing real estate used primarily for industrial purposes in Singapore and as data centres worldwide beyond Singapore, as well as real estate-related assets, with the primary objective of achieving sustainable returns from rental income and long-term capital growth.
MIT’s property portfolio includes Data Centres (Singapore), Data Centres (North America), Hi-Tech Buildings, Business Park Buildings, Flatted Factories, Stack-up/Ramp-up Buildings and Light Industrial Buildings.
MIT’s property portfolio comprised properties in Singapore and North America (including data centres held through the joint venture with MIPL).
MIT’s distribution policy is to distribute at least 90.0% of its taxable income, comprising substantially rental income from the letting of its properties and related property services income after deduction of allowable expenses, as well as interest income from the periodic placement of cash surpluses in bank deposits.
MIT is managed by Mapletree Industrial Trust Management Ltd. and sponsored by Mapletree Investments Pte Ltd.
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