Mapletree Industrial Trust (MIT) reported its 2QFY17 results which met our expectations. Gross revenue rose 1.8% YoY to S$84.2m due to higher rental rates achieved across all property segments and higher occupancy at its Hi-Tech Buildings segment. NPI rose 4.3% to S$63.6m, which translates into a NPI margin of 75.6% (+1.8 ppt YoY). DPU was up 1.4% to 2.83 S cents.

For 1HFY17, MIT’s gross revenue increased 2.4% to S$168.3m and DPU grew 2.9% to 5.68 S cents. These formed 49.5% and 50.9% of our FY17 forecasts, respectively. Its average portfolio passing rent was unchanged QoQ at S$1.92 psf/month.

In terms of renewal leases signed during 2QFY17, positive rental reversions were achieved for Flatted Factories (+2.7%) and Business Park Buildings (+0.5%), but negative rental reversions were registered at Hi-Tech Buildings (-0.5%) and Stack-up/Rampup Buildings (-2.3%). We will provide more updates after the analyst briefing.

Maintain HOLD and S$1.67 fair value estimate on MIT.

Source: OCBC Research - 25 Oct 2016

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