Mapletree Industrial Trust: 3 Things Investors Should Know From Its Latest Earnings
Mapletree Industrial Trust (SGX: ME8U) is a REIT that focuses on the industrial real estate sector in Singapore. It currently has 86 properties in its portfolio (all in Singapore) that are collectively valued at S$3.7 billion.
Last week, the REIT reported its results for its fiscal year ended 31 March 2017 (FY16/17). Let’s look at three useful pieces of information that investors may want to know from the announcement:
1. The overall result
The following table shows some important numbers from Mapletree Industrial Trust’s income statement for FY15/16 and FY16/17:
Source: Mapletree Industrial Trust FY16/17 full year earnings presentation
We can see that the REIT reported growth in gross revenue, net property income, and distribution per unit (DPU).
2. Occupancy rates
The occupancy rate of a REIT’s portfolio is an important indication of the level of demand for its properties. Here’s a table showing the occupancy rates of the different classes of industrial properties that Mapletree Industrial Trust has in its portfolio:
Source: Mapletree Industrial Trust FY16/17 full year earnings presentation
What we can observe is that the REIT has mostly turned in a sequential improvement in its occupancy rates. Moreover, its properties have occupancy rates of 90% or more on average at the end of FY16/17.
3. Growth in distributions
A very important source of return that investors get from a REIT is its distributions. As such, it’s ideal to find a REIT that has displayed growth in its DPU over a long period of time.
The chart below shows the quarterly distributable income and DPU for Mapletree Industrial Trust since the third quarter of its FY10/11:
Source: Mapletree Industrial Trust FY16/17 full year earnings presentation
Although the REIT’s DPU has not grown in each quarter, there’s still an unmistakable upward climb through the years.
