Mapletree Logistics Trust’s FY2023 Earnings: Here’s What S-REIT Investors Need to Know

May 2, 2023

Singapore logistics REIT buy

The big REITs in Singapore have been reporting their latest quarterly numbers in the past two weeks. In this high interest-rate environment, dividend lovers are watching closely how the S-REITs perform.

Rather unusually, large logistics-focused REIT Mapletree Logistics Trust (SGX: M44U) actually released its latest Q4 FY2023 results on Monday (1 May) – a public holiday in Singapore.

Mapletree Logistics Trust – like other Mapletree REITs – has a fiscal year (FY) that ends on 31 March so it posted its fourth-quarter and full-year numbers together (Q4 FY2023 and FY2023).

The REIT is a vertibale giant in the Singapore REIT space, with 185 logistics properties (as of 31 March 2023) across Singapore, Hong Kong, Mainland China, Australia, India, South Korea, Japan, Vietnam, and Malaysia.

So, for those of us who are interested in how Singapore REITs are performing, from a business perspective, here’s everything you need to know about Mapletree Logistics Trust’s latest numbers.

Revenue and NPI both down slightly; DPU flat

For the latest quarter (Q4 FY2023), Mapletree Logistics Trust saw its gross revenue and net property income (NPI) decline 2.2% and 1.8% to S$178.9 million and S$154.3 million, respectively.

These decreases mainly came from the depreciation of specific Asian currencies, such as the RMB, JPY, KRW, and AUD versus the Singapore dollar (SGD).

However, this was partially offset by its acquisitions in China, South Korea, Vietnam, and Malaysia that were completed in Q1 FY2023 and Q4 FY2023.

Obviously, borrowing costs also increased in the latest quarter, up 25.5% year-on-year to S$34.8 million.

However, Mapletree Logistics Trust’s distribution per unit (DPU) – which is a key metric for dividend investors – was flat year-on-year at 2.268 Singapore cents.

Management did note that its DPU would have increased by 3.3% year-on-year – on a like-for-like basis – based on the exchange rates in Q4 FY2022.

On a FY2023 basis versus FY2022, the REIT’s DPU was actually up 2.5% year-on-year to 9.011 Singapore cents. That’s a rare occurrence in the REIT space right now given rising interest rates.

Rental reversions positive and occupancy higher

As ever, it’s important for investors to understand whether a REIT’s properties are in demand and, in turn, able to extract higher rents.

For Mapletree Logistics Trust, the initial data were positive. That’s because its average rental reversion in Q4 FY023 (for the three months ending 31 March 2023) was positive at +3.1%.

Its overall occupancy rate also increased slightly to 97.0%, as of 31 March 2023, from 96.9% at the end of 2022.

The REIT’s weighted average lease expiry (WALE) is 3.1 years but it’s also well-staggered over the next few years (see below).

Mapletree Logistics Trust Q4 FY2023

Source: Mapletree Logistics Trust Q4 FY2023 and FY2023 earnings presentation

What’s more, it has nearly 30% of its leases – by net lettable area – expiring in FY2024. With the positive momentum seen in its current FY2023 rental reversions, that should bode well for renewals this year.

Early DPU payout on back of acquisitions

If investors recall, Mapletree Logistics Trust recently announced a large acquisition of eight properties in Japan, South Korea, and Australia.

As a result of a private placement fundraising, the REIT announced an early cumulative distribution for the period 1 January 2023 to 10 April 2023, with a DPU amount of 2.502 Singapore cents.

With regards to the acquisition, the REIT announced the closing of the six logistics properties in Japan last week (28 April).

Those properties should start to contribute to Mapletree Logistics Trust’s top and bottom lines for the current quarter.

Solid quarter for a giant logistics REIT

Overall, it was another solid set of numbers for Mapletree Logistics Trust as its acquisition strategy continues to bear fruit.

The REIT, after closing on the Japanese portion of its acquisition, now has 191 properties in Asia-Pacific. Management did say that it would continue to optimise its portfolio through cost management, active portfolio rejuvenation and divestments.

Indeed, the REIT did dispose of two older properties – one in Singapore and one in Malaysia – during FY2023.

At its current price, Mapletree Logistics Trust is offering REIT investors a 5.1% dividend yield.

Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips owns shares of Mapletree Logistics Trust.

Tim Phillips

Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.

He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.

In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.

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