MAPLETREE Industrial Trust (MIT) reported a distribution per unit (DPU) of S$0.0337 for the second fiscal quarter ended Sep 30, 2024, up 1.5 per cent from S$0.0332 in the corresponding year-ago period.
Its manager noted a “robust operational performance”, with higher average overall portfolio occupancy quarter on quarter, and positive rental revisions in Singapore, in a bourse filing on Tuesday (Oct 29).
Distribution to unitholders, at S$95.8 million, grew 1.9 per cent from S$94.1 million in the year-ago quarter. This included the distribution of a net divestment gain of S$13.4 million, from 115A and 115B Commonwealth Drive, over four quarters of the 2024/2025 financial year.
But the distribution to unitholders in Q2 a year ago included compensation for the compulsory acquisition of land at 2 and 4 Loyang Lane, and net divestment gains from the sale of 65 Tech Park Crescent.
Revenue for Q2 in the current financial year rose 4.2 per cent year on year to S$181.4 million, from S$174.1 million previously. Net property income (NPI) climbed 4.6 per cent to S$134.5 million from S$128.6 million.
The increases were driven by revenue contributions from the data centre in Osaka, Japan, acquired on Sep 28 last year, and new leases and renewals across various property clusters, the manager said. The higher NPI was partially offset by higher borrowing costs in relation to the Osaka data centre, it added.
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Gross revenue and NPI do not include MIT’s interests in its North American joint venture with Mapletree Investments, which is equity accounted.
MIT’s portfolio occupancy stood at 92.9 per cent as at end-September, up from 91.9 per cent as at end-June. These include its 50 per cent interest of the joint venture.
“This was mainly attributed to the full quarter effect of the lease commencement of Vanderbilt University Medical Center at 402 Franklin Road, Brentwood,” the manager said.
This resulted in a higher average occupancy rate for MIT’s North American portfolio. Its average Singapore portfolio occupancy increased marginally to 93.7 per cent in Q2 FY24/25, from 93.6 per cent in the preceding quarter.
In Tuesday’s filing, MIT also provided an update for the latest half year.
For the six months ended Sep 30, DPU grew to S$0.0680, from S$0.0671 a year ago. This came alongside an increase in distribution to unitholders, which grew 2.8 per cent to S$193.1 million from S$187.8 million.
Revenue for H1 FY24/25 rose 3.5 per cent to S$356.7 million and NPI gained 2.9 per cent to S$267 million.
On Sep 30, MIT announced the proposed acquisition of a freehold mixed-use facility in Tokyo for 14.5 billion yen (S$130 million). This was completed on Tuesday.
“The addition of this freehold property will enhance MIT’s geographical and income diversification, the manager said, adding that its strategic location will also present a future redevelopment opportunity into a new data centre.”
The property is fully leased to an established Japanese conglomerate and offers stable cash flow, it added.
“Numerous risks such as the escalation of trade tensions and persistent inflation remain,” said the manager. “Increasing property operating expenses and elevated borrowing costs continue to exert pressure on distributions.”
It plans to will adopt cost-mitigating measures and focus on tenant retention, to maintain a stable portfolio occupancy level as well as prudent capital management to balance the risks and costs in the uncertain macroeconomic environment.
As for MIT’s distribution reinvestment plan (DRP), the manager said about S$16.6 million of cash retained from it for Q1 FY24/25 distribution was utilised to pare down loans. This represented a take-up rate of 17.7 per cent.
The DRP will continue to be applied for the Q2 distribution “to strengthen MIT’s balance sheet and accord MIT with the financial flexibility to pursue growth opportunities”.
The distribution for Q2 will be paid in cash or DRP units on Dec 18.
Units of MIT closed at S$2.39, down S$0.04 or 1.6 per cent, on Tuesday, before the announcement.
