Mapletree Industrial Trust’s Q1 FY2024 Earnings: What Dividend Investors Need to Know

July 31, 2023

Data centre REIT Singapore

Singapore’s REIT market is one of the largest in Asia. And its biggest REITs have been reporting their latest earnings over the past few weeks.

Last week was the turn of industrial and data centre-focused REIT Mapletree Industrial Trust (SGX: ME8U).

The Mapletree-backed REIT – which is part of the Straits Times Index – released its Q1 FY2024 results (for the three months ending 30 June 2023) last Wednesday (26 July) after the market closed.

For dividend investors who are interested in how Mapletree Industrial Trust performed in its latest quarter, here are some key takeaways.

DPU down year-on-year but up sequentially

As one of the few Singapore REITs that pays out a dividend every quarter, Mapletree Industrial Trust’s distribution per unit (DPU) is closely watched by investors.

For Q1 FY2024, the REIT announced a DPU of 3.39 Singapore cents, which was down 2.9% year-on-year from the 3.49 Singapore cents for Q1 FY2023.

That came from an expansion in the unit base following May’s private placement and also the uptake from the distribution reinvestment plan (DRP).

However, on a quarter-on-quarter basis, the DPU was up 1.8% from the Q4 FY2023 DPU of 3.33 Singapore cents.

That increase was attributable to lower property operating expenses and borrowing costs.

All this was driven by top line growth of 1.7% year-on-year to S$170.6 million in revenue, mainly coming from contributions from new leases.

Portfolio occupancy dips, rental reversions positive

In Q1 FY2024, Mapletree Industrial Trust’s portfolio occupancy fell 160 basis points quarter-on-quarter to 93.9% as the addition of new completed space at Mapletree Hi-tech Park @ Kallang Way came into the equation.

There was also non-renewal of some Singapore and US data centre leases. Overall, Singapore’s portfolio occupancy took more of a hit during the quarter (see below).

Mapletree Industrial Trust Q1 FY2024 portfolio occupancy

Source: Mapletree Industrial Trust Q1 FY2024 earnings presentation

Offsetting this was positive news on the rental reversions front, as rental reversions were positive to the tune of +5.3% during Q1 FY2024.

Slightly higher leverage as it enters new Asian DC market

Mapletree Industrial Trust ended Q1 FY2024 with a gearing ratio of 38.2%, which was up from the 37.4% as of the end of March 2023.

This was down to yen-denominated loans that were used to fund its first foray into the Japanese data centre market – an Osaka data centre acquisition it announced in May 2023.

Overall, it was a decent quarter for the data centre and industrial REIT.

Rental reversions could continue to be positive in the quarters ahead but investors should watch for any slowdown in the data centre markets in North America or Singapore.

Mapletree Industrial Trust’s share price is flat so far in 2023 and its shares are offering investors a 12-month forward dividend yield of 6.1%.

Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips doesn’t own shares of any companies mentioned.

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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