SGX Market Updates

REIT Watch - Mapletree S-Reits’ Scorecards Reflect Operational Resilience Despite Global Slowdown

Publish date: Mon, 30 Oct 2023, 11:11 AM
REIT Watch - S-Reits in the Mapletree family

Mapletree Logistics Trust (MLT) reported 1.5 per cent higher year-on-year gross revenue in the second quarter of FY23/24. This was on the back of higher contributions from existing assets mainly in Singapore and Hong Kong, and recent acquisitions in Japan, Australia and South Korea, and offset by weaker performance in China.

With forex hedging and including a divestment gain of S$8.8 million, the amount distributable to unitholders increased 4.2 per cent year on year, and distribution per unit (DPU) grew 0.9 per cent to 2.268 cents on an enlarged unit base.

During the quarter, MLT completed divestments of four assets in Malaysia, Singapore and Japan, which were executed at an average premium to valuation of 13 per cent.

MLT’s portfolio occupancy was maintained at 96.9 per cent and 89 per cent of leases that were due for expiry in the quarter were renewed, with weighted average lease expiry at three years.

Positive rental reversions were recorded ranging from 3.2 per cent in Malaysia to 16.5 per cent in Hong Kong, except for China which registered negative rental reversion of -8.6 per cent due to weakness in Tier 2 cities.

Amid the slowdown, MLT expects rental rates for most markets to remain stable, with the exception of China which is likely to remain negative in the near term.

Approximately three-quarters of MLT’s portfolio by revenue serves consumer-related sectors with its top three tenant trade sectors being food & beverage (20 per cent), consumer staples (19 per cent), and electronics & IT (13 per cent).

Mapletree Pan Asia Commercial Trust (MPACT) recorded 10.1 per cent and 8.7 per cent year-on-year growth in gross revenue and net property income respectively in the second quarter of FY23/24, driven by stronger performance of the Singapore assets and full period contributions from the overseas assets.

However, given the stronger Singapore dollar and higher interest rates, MPACT’s DPU declined 8.2 per cent to 2.24 Singapore cents.

In terms of operational performance, MPACT during its first half FY23/24 successfully renewed over 1.3 million square feet of lettable area, yielding a 3.2 per cent portfolio rental uplift. VivoCity and Mapletree Business City, two of its core assets, recorded rental uplifts of 14.2 per cent and 7.1 per cent respectively.

MPACT’s portfolio committed occupancy climbed from 95.7 per cent to 96.3 per cent quarter on quarter. Increased commitments were also recorded in the majority of markets, with VivoCity and Festival Walk close to full commitment.

VivoCity continues to record stronger shopper traffic and tenant sales, increasing 17.4 per cent and 4 per cent year on year respectively.

Mapletree Industrial Trust (MIT) announced that the distribution to unitholders for the second quarter of FY23/24 rose 3.5 per cent year on year, partly due to higher distribution declared by its joint venture and other gains. MIT’s DPU declined 1.2 per cent to 3.32 cents as a result of an enlarged unit base.

During the quarter, MIT registered positive rental revisions across all property segments with higher average rental rates for its Singapore portfolio and North American portfolio at S$2.19 per square foot per month (psf/mth) and US$2.42 psf/mth respectively.

MIT also completed the acquisition of a data centre in Osaka, Japan, which has increased the weighted average lease to expiry for its overall portfolio from 3.9 years to 4.2 years.

MIT’s manager notes that as global growth was projected to slow down, the Reit will adopt cost-mitigating measures while focusing on tenant retention to maintain a stable portfolio occupancy and prudent capital management to manage costs.

Currently, MIT’s top 10 tenants form about 30.5 per cent of the portfolio’s gross rental income, and no single trade sector accounts for over 17 per cent of its portfolio’s gross rental income.

Source: SGX Research S-Reits & Property Trusts Chartbook.

REIT Watch is a weekly column on The Business Times, read the original version.

Enjoying this read?

  • Subscribe now to the weekly SGX My Gateway newsletter for a compilation of latest market news, sector performances, new product release updates, and research reports on SGX-listed companies.
  • Stay up-to-date with our SGX Invest Telegram channel. 
Related Stocks
Be the first to like this. Showing 0 of 0 comments

Post a Comment