MAPLETREE INDUSTRIAL TRUST

MAPLETREE INDUSTRIAL TRUST | NEUTRAL

TARGET PRICE: $2.09

JULY 26 CLOSE: $2.02

Phillip Capital, July 25

Gross revenue and DPU for Mapletree Industrial Trust (MIT) were within expectations, meeting 25.6 per cent and 24.8 per cent respectively of our FY19 full-year estimate.

On June 27, the Trust acquired 7 Tai Seng Drive, which is to be upgraded to a hi-tech building.

A gearing of 35 per cent remains relatively low, compared to the Industrial Reits sub-sector average of 37.4 per cent as at March 31. Meanwhile, 30A Kallang Place achieved 43.8 per cent committed occupancy, which is higher than the 40 per cent in the previous quarter.

Nonetheless, lower occupancy across all segments except its Business Park buildings resulted in lower portfolio occupancy from 90 per cent to 88.3 per cent quarter on quarter. Overall, the portfolio also suffered a weighted average negative rental reversion of -3.7 per cent.

That being said, outlook for MIT is stable. At the industrial sector level, there are headwinds from vacancies and negative reversions. However, contributions from inorganic sources such as the US data centres joint venture, 30A Kallang Place and Mapletree Sunview 1 are adequate to offset organic weakness for FY19.

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