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Mapletree Industrial Trust posts 7.4% y-o-y fall in 1Q20 DPU to 2.87 cents

Felicia Tan
Felicia Tan • 3 min read
Mapletree Industrial Trust posts 7.4% y-o-y fall in 1Q20 DPU to 2.87 cents
The increase in distributable income was mainly due to higher 1Q20/21 net property income (NPI), which improved marginally by 0.9% y-o-y to $78.7 million, and new contributions from the acquired 13 data centres in North America.
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SINGAPORE (July 21): The manager of Mapletree Industrial Trust (MIT) has reported a distribution per unit (DPU) of 2.87 cents for 1Q20/21 ended June 30, down 7.4% from the DPU of 3.10 cents in 1Q19/20.

Distributable income for the quarter stood at $70.6 million, up 11.6% from the previous year’s $63.2 million.

The increase in distributable income was mainly due to higher 1Q20/21 net property income (NPI), which improved marginally by 0.9% y-o-y to $78.7 million, and new contributions from the acquired 13 data centres in North America held under Mapletree Rosewood Data Centre Trust (MRDCT).

Mapletree Rosewood Data Centre Trust is a joint venture between MIT and Mapletree Investments.

However, DPU for the quarter decreased due to the withholding of tax-exempt income of $7.1 million relating to the distributions declared by joint ventures in 1Q20/21.

Had the tax-exempt income distributions not been withheld, the DPU for 1Q20/21 would have been 3.19 cents.

Gross revenue for the REIT in 1Q20/21 fell 0.5% y-o-y to $99.1 million due to rental rebates extended to tenants under the Covid-19 Assistance and Relief Programme, which offset higher revenue contributions from 7 Tai Seng Drive, The Strategy, and 30A Kallang Place.

The quarter’s property operating expenses decreased by 5.6% year-on-year to $20.5 million due mainly to lower property maintenance and utilities expenses.

From April 1, Data Centres under the Trust were reclassified as a standalone property segment to reflect its growth within the portfolio. The remaining high-specification industrial buildings in Singapore will continue to be classified as Hi-Tech Buildings.

The Trust’s average overall portfolio occupancy for 1Q20/21 fell 0.4% q-o-q to 91.1%. All property segments except Data Centres recorded lower average occupancy rates compared to the previous quarter.

The average rental rate of MIT’s Singapore portfolio fell to $2.08 psf per month in 1Q20/21 from $2.11 psf/mth in 4Q19/20.

All property segments except the Data Centres (Singapore) and Light Industrial Buildings registered lower average rental rates due mainly to the rental rebates given under the COVID-19 Assistance and Relief Programme to assist MIT tenants.

The MRDCT portfolio has a weighted average lease expiry (WALE) of about 4.9 years as at 30 June, with about 97.7% of the leases (by gross rental income) with annual rental escalations of 2% and above.

Looking ahead, the manager estimates that the rental reliefs extended to tenants would amount to some $20 million, which will affect MIT’s distributable income for FY20/21.

“It has been a challenging quarter for the Singapore Portfolio as businesses navigated through severe economic headwinds including the suspension of on-site business activities during the extended Circuit Breaker period,” says Tham Kuo Wei, CEO of the manager.

“We have supported our tenants through the COVID-19 Assistance and Relief Programme by providing rental rebates and lease restructuring options. The tax-exempt income of S$7.1 million has been withheld in 1QFY20/21 to mitigate the impact of mandated rental reliefs for tenants,” he adds.

“Our growth strategy has evolved to focus on more resilient property segments including Data Centres, Hi-Tech Buildings and Business Park Buildings. The Proposed Acquisition of the remaining 60% interest in the 14 data centres in the United States will help MIT improve its portfolio income stability and resilience,” he concludes.

Units in MIT closed 2 cents higher, or 0.7% up, at $2.97.

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